TIDM88E
RNS Number : 2191D
88 Energy Limited
25 April 2017
This Announcement contains Inside Information.
25 April 2017
88 Energy Limited
Icewine#2 Drilling Commenced
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
-- Spud of Icewine#2 Production Test well occurred at 1915 24(th) April (Alaska time)
o Arctic Fox currently drilling ahead
Icewine#2 Drilling Commenced
Drilling at the Icewine#2 Production Test well commenced at 1915
24(th) April (Alaska time). The Arctic Fox rig is currently
drilling ahead in the surface hole.
Production testing remains on schedule for late June / early
July.
Further updates will be made as and when appropriate throughout
the drilling / testing program.
Managing Director of 88 Energy Limited, Dave Wall commented:
"The spud of Icewine#2 represents another milestone for the
Company and its shareholders and we now look forward to a safe
operation, above all else.
It is only a few short weeks before production testing begins,
which could unlock the huge resource potential of the HRZ shale
play."
Media and Investor Relations:
88 Energy Ltd
Dave Wall, Managing Director Tel: +61 8 9485 0990
Email: admin@88energy.com
Finlay Thomson, Investor Relations Tel: +44 7976 248471
Hartleys Ltd
Dale Bryan Tel: + 61 8 9268 2829
Cenkos Securities Tel: + 44 131 220 6939
Neil McDonald/Derrick Lee
Pursuant to the requirements of the ASX Listing Rules Chapter 5
and the AIM Rules for Companies, the technical information and
resource reporting contained in this announcement was prepared by,
or under the supervision of, Mr Brent Villemarette, who is a Non
Executive Director of the Company. Mr Villemarette has more than 30
years' experience in the petroleum industry, is a member of the
Society of Petroleum Engineers, and a qualified Reservoir Engineer
who has sufficient experience that is relevant to the style and
nature of the oil prospects under consideration and to the
activities discussed in this document. Mr Villemarette has reviewed
the information and supporting documentation referred to in this
announcement and considers the prospective resource estimates to be
fairly represented and consents to its release in the form and
context in which it appears. His academic qualifications and
industry memberships appear on the Company's website and both
comply with the criteria for "Competence" under clause 3.1 of the
Valmin Code 2015. Terminology and standards adopted by the Society
of Petroleum Engineers "Petroleum Resources Management System" have
been applied in producing this document.
Project Icewine Overview
In November 2014, the Company entered into a binding agreement
with Burgundy Xploration (BEX) to acquire a significant working
interest (87.5%, reducing to 77.5% 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 June 2016, the gross acreage
position was expanded to 271,119 contiguous acres (210,250 acres
net to the Company). In December 2016 the Company successfully bid
on additional acres. On award the Project Icewine gross acreage
position will be further expanded to 690,000 contiguous acres
(400,000 acres net to the Company assuming all rights are taken
up).
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
driiling at the followup appraisal well, Icewine#2, commencing
early 2Q2017. Production testing is scheduled to occur in mid
2017.
Significant conventional prospectivity has also been identified
on recently acquired 2D seismic across the project acreage.
Generous exploration incentives are provided by the State of
Alaska with up to 35% of net operating loss 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.
Recently acquired 2D seismic has identified large conventional
leads at Project Icewine within the same Brookian petroleum system
and shallow to the HRZ shale, including potential high porosity
channel and turbiditic sands associated with slope apron and
deepwater fan plays. The Brookian conventional play is proven on
the North Slope; the USGS (2013) estimated the remaining oil
potential to be 2.1 billion barrels within the Brookian sequence.
Two recent discoveries in the Brookian have already exceeded these
estimates, with Armstrong/Repsol discovering 1.4 billion barrels in
2015 and Caelus announcing a 2.5 billion barrel discovery in 2016.
Additional conventional potential exists in the Brookian delta
topset play, deeper Kuparuk sands and the Ivishak Formation.
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 77.5% working interest and
operatorship in 271,000 acres onshore the prolific North Slope of
Alaska ("Project Icewine"). Gross contiguous acreage position will
expand on award of additional leases successfully bid on in the
December 2016 State of Alaska North Slope Licensing Round.The North
Slope is the host to 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 highly prospective play types that are likely to exist
on the Project Icewine acreage - two conventional and one
unconventional. The large unconventional 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 Trans
Alaska Pipeline System. The Company acquired 2D seismic in early
2016 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. Results from the seismic mapping
and prospectivity review are encouraging, and form the basis of a
conventional prospectivity portfolio for Project Icewine. In late
2015, the Company completed its maiden well at the project,
Icewine#1, to evaluate an unconventional source rock reservoir play
which yielded excellent results from analysis of core obtained from
the HRZ shale. The follow-up well with a multi-stage stimulation
and test of the HRZ shale, Icewine#2, spud in early 2Q2017.
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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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