Share Price: 0.825 Bid: 0.80 Ask: 0.85 Change: 0.00 (0.00%) No Movement on 88 Energy
Spread: 0.05 Spread as %: 6.25% Open: 0.825 High: 0.825 Low: 0.825 Yesterday’s Close: 0.825
Reinvented 88 Energy encouraged by nearby well results in Alaska Having reinvented itself as an Alaska-focused explorer, Perth-based 88 Energy has been encouraged in its new venture by the results of a Repsol/Armstrong joint venture on nearby acreage. The Repsol/Armstrong JV was testing conventional play fairways that may extend into the ASX-listed company’s Project Icewine, a near 90,000 acre tract on the North Slope in which it has an 87.5 per cent stake following a Q4 2014 farm-in deal with Burgundy Xploration. Dave Wall, managing director of 88 Energy Ltd, which earlier this year shed its interests in Morocco completing its turn-around story, said the results from the near-by operators were “outstanding and well above expectation”. “They clearly vindicate Repsol’s US$768 million deal with Armstrong in 2011 as well as highlight the success that can be achieved through utilisation of modern 3D seismic on the North Slope,” said Wall. “The flow rates, large areal extent, reservoir quality and oil gravity all point towards what are likely to be large to very large commercial discoveries, located only 50 miles from the boundary of our project.” Denver-based Armstrong said it tested two Nanushuk formation wells in the 2014/2015 winter campaign, including the Qugruk 8 (Q-8) vertical well, which tested a small portion of the net pay zone and flowed 30 degree API gravity crude at rates of up to 2,160 bpd while Qugruk 301 (Q-301) tested a 2,000 foot horizontal lateral and flowed at tubing-constrained rates as high as 4,600 bpd with minimal bottom hole pressure drawdown. The company and Repsol also completed two new penetrations in the East Alpine field. “These new discoveries show the immense potential that still exists on the North Slope of Alaska,” said Bill Armstrong, President of Armstrong Oil & Gas, which is targeting conventional oil projects in the state, where recently passed legislation has improved terms for new drilling and development. This is good news for 88 Energy, which sees material conventional plays across its acreage, which it hopes to unlock by using 3D seismic. The Australian company’s immediate focus, however, is to target the world class unconventional oil potential it sees at Project Icewine. This is real frontier territory. The primary objective is an untested, unconventional liquids-rich shale play in a prolific source rock, the HRZ shale (Brookian Sequence), that co-sourced the largest oil field in North America: the giant Prudhoe Bay oilfield complex. Internal modelling and analysis indicates that Project Icewine is located in a high liquids sweetspot analogous to those encountered in other Tier 1 shale plays, such as the prolific Eagle Ford Shale in Texas. The next key step is the drilling of a first well to put this theory to the test. The company is aiming to drill the Icewine-1 exploration well before the end of the year
The Company continues to make good progress on strategic funding / farmout discussions and is currently engaged with multiple parties on this front. More detail will become available in the coming weeks. David Wall, 88 Energy's Managing Director, commented: "With the project moving forward at a cracking pace on all fronts, combined with the recent success by Repsol and the recovery in oil price, 88E and its shareholders could not be much better positioned. Drilling remains on track for prior to year end spud as strategic funding/farm-out talks progressing concurrently with operational activity. We anticipate strong newsflow in the near term with several significant milestones likely to be achieved."Dave Wall commented: "Erik's appointment is one of several key milestones expected to be announced over the coming weeks and is a crucial step forward for the Company. Local experience cannot be underestimated, particularly when operating in a unique environment such as Alaska. Erik brings a wealth of knowledge and experience plus a deep local network, which has already resulted in the identification of cost savings in the order of several million dollars. 88 Energy and its shareholders are extremely fortunate to have secured the services of an individual of Erik's calibre."Oz tends to follow AIM unless they get news first. Once the story unfolds, there will be an upward movement in shares prior to drilling later in the year. They look to be building a very experienced team for this project. What encourages me is the overall progress and news flow due anytime now in the 14th May RNS:-
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