When using offline boot media, the Task Sequence Wizard will fail with error code 0x8007000F just before staging the WinPE.
The SMSTs.log (X:\Windows\Temp\Smstslog\SMSTs.log) will show the below error msg;
Failed to prepare the system partition for staging.
The system cannot find the drive specified. (Error: 8007000F; Source: Windows)
So the problem is WinPE cannot find the local drive of the machine to stage the media, even though the drive exists.
So the best way to resolve this issue is,
Launch command prompt from the WInpE by pressing F8,
then type Diskpart
On the Diskpart window select disk 0
Reboot the machine using Boot disk.
Now everything will work as expected.