TIDM88E
RNS Number : 8857I
88 Energy Limited
05 September 2016
5 September 2016
Icewine#2 Well Design Complete and Preliminary 2D Seismic
Results
88 Energy Limited ("88 Energy", "the Company", "Operator") (ASX,
AIM: 88E) is pleased to provide an update on Project Icewine,
located onshore North Slope of Alaska.
Highlights
-- Finalisation of Well Design for Icewine#2
o Well design revised and finalised as vertical completion with
multi-stage stimulation
o Optimised to achieve program objectives at reduced cost
-- 88E fully funded for Icewine#2 from current cash position
o New design will test both HRZ/HUE shales with potential for
significant resource upgrade
-- Interpretation of inline/crossline 2D in Franklin Bluffs Area progressing well
o Subtleties of seismic stratigraphic plays clearly imaged on
new 2D extracts
o Progradational sequence evident, potential basal floor fan,
amplitude anomaly
-- Processing of 2D data from recently acquired vibroseis over
two thirds of Project Icewine acreage nearing completion
o Data is of high resolution with excellent lateral reflector
continuity throughout the stratigraphic sequence
Well Design Complete
88 Energy, in consultation with its partner, Burgundy Xploration
(together the "Joint Venture"), has finalised the well design for
Icewine#2. Upon strategic review of the desired objectives for
Icewine#2, the Joint Venture has concluded that a vertical well
with a multi stage stimulation is superior to the initially
proposed lateral well.
The vertical well design will allow the Joint Venture to:
-- test production potential of entire HRZ/HUE interval with potential for resource upgrade
o HRZ remains premier reservoir and primary target
-- enhance dataset for landing zone selection of future laterals
-- decrease drilling risk associated with a more complex lateral completion
-- increase availability of suitable rigs and result in a more competitive tender process
-- lower the estimated cost of the well completion by US$5m,
meaning that 88 Energy is fully funded for the costs associated
with Icewine#2 from its current cash position
For more detail, please refer to the presentation releases on
ASX today, which is also available on the Company's website
www.88energy.com.
Preliminary 2D Seismic Results
Interpretation of the processed inline/crossline 2D seismic data
(purchased as extracts from 3D seismic acquired in 2015 using
dynamite) is at an early stage, but is progressing well due to the
excellent data quality. Initial observations indicate the presence
of seismic stratigraphic features, consistent with a potential
basin floor fan play fairway. Further seismic interpretation and
geological analysis is required to evaluate the exploration
potential of this fairway, which could lead to the maturation of an
attractive drilling portfolio.
In addition, processing of the 2D data acquired this year by 88
Energy using vibroseis, over approximately two thirds of the
Project Icewine acreage, is nearing completion. Initial
observations indicate data quality of the same calibre as the 2D
extracts referred to above. Interpretation remains on schedule to
commence in September 2016, with results to follow several weeks
later.
Further details on the finalised well design and 2D seismic
progress can be found in the presentation released to the ASX
today, which is also available on the Company's website
www.88energy.com.
Managing Director of 88 Energy Limited, Dave Wall commented:
"The revision to the well design has resulted in a best of both
worlds scenario for 88 Energy and its shareholders. We now have a
more efficient, lower cost outcome that optimises achievement of
the operational objectives targeted by the Icewine#2 well.
Additionally, we are highly encouraged by the initial results
from the 2D seismic at this very early stage of
interpretation."
Media and Investor Relations:
Australia
88 Energy Ltd
admin@88energy.com
+61 8 9485 0990
Hartleys Limited
As Corporate Advisor
Mr Dale Bryan
+61 8 9268 2829
United Kingdom
Cenkos Securities
Plc
As Nominated
Adviser Mr Derrick Lee
Mr Neil McDonald
Tel: +44 (0)131 Tel: +44 (0)131
220 9771 / +44 220 9100 / +44
(0)207 397 1953 (0)207 397 8900
Project Icewine Highlights
In November 2014, the Company entered into a binding agreement
with Burgundy Xploration (BEX) to acquire a significant working
interest (87.5%, reducing to 78% on spud of the first well on the
project) in a large acreage position on a multiple objective,
liquids rich exploration opportunity onshore Alaska, North America,
referred to as Project Icewine. In November 2015, the gross acreage
position was expanded by 172,937 acres (formal award finalised in
June 2016) to 271,119 contiguous acres (210,250 acres net to the
Company).
The Project is located on an all year operational access road
with both conventional and unconventional oil potential. The
primary term for the State leases is 10 years with no mandatory
relinquishment and a low 16.5% royalty.
The HRZ liquids-rich resource play has been successfully
evaluated based on core obtained in the recently completed
(December 2015) Icewine #1 exploration well, marking the completion
of Phase I of Project Icewine. Phase II has now commenced, with
planning for a vertical multi-stage stimulated well, Icewine#2,
currently underway.
Cautionary Statement: The estimated quantities of petroleum that
may be potentially recovered by the application of a future
development project relate to undiscovered accumulations. These
estimates have both an associated risk of discovery and a risk of
development. Further exploration, appraisal and evaluation are
required to determine the existence of a significant quantity of
potentially movable hydrocarbons.
Generous exploration incentives are provided by the State of
Alaska with up to 35% of exploration expenditure refundable in
cash.
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 Oil Field Complex. Internal
modelling and analysis indicates that Project Icewine is located in
a high liquids vapour phase sweetspot analogous to those
encountered in other Tier 1 shale plays e.g. the Eagle Ford,
Texas.
Conventional play potential can be found at Project Icewine
within the same Brookian petroleum system and shallow to the HRZ
shale and includes high porosity channel and deep water turbiditic
sands. The Brookian conventional play is proven on the North Slope;
the USGS (2013) estimate the remaining oil potential to be 2.1
billion barrels just within the Brookian sequence. Additional
conventional potential exists in the deeper Kuparuk sands and the
Ivashuk Formation.
Drilling in (2012), on the adjacent acreage to the north,
confirmed that the HRZ shales, along with the underlying Kingak
& Shublik shales, were all within the oil window which is
extremely encouraging for the unconventional potential at Project
Icewine. In addition, a conventional oil discovery was reported in
the Kuparuk sandstones.
A Prospective Resources Report by DeGolyer and MacNaughton, was
commissioned by 88 Energy to evaluate the unconventional resource
potential of Project Icewine in February 2016 and was released to
the market on 6(th) April 2016.
About 88 Energy: 88 Energy has a 78% working interest and
operatorship in 271,000 acres onshore the prolific North Slope of
Alaska ("Project Icewine"). The North Slope is the host for the 15
billion barrel Prudhoe Bay oilfield complex, the largest
conventional oil pool in North America. The Company, with its Joint
Venture partner Burgundy Xploration, has identified three highly
prospective play types that are likely to exist on the Project
Icewine acreage - two conventional and one unconventional. The
large resource potential of Project Icewine was independently
verified by leading international petroleum resource consultant
DeGolyer and MacNaughton. In addition to the interpreted high
prospectivity, the project is strategically located on a year-round
operational access road and only 35 miles south of Pump Station 1
where Prudhoe Bay feeds into the TransAlaska Pipeline System. The
Company has recently acquired 2D seismic to take advantage of the
globally unique fiscal system in Alaska, which allowed for up to
75% of 1H2016 exploration expenditure to be rebated in cash. In
late 2015, the Company completed its maiden well at the project,
Icewine#1, with excellent results from analysis of core obtained in
the HRZ shale. A follow-up well with a multi-stage stimulation,
Icewine#2, is planned for 1Q2017.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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