TIDM88E
RNS Number : 8298I
88 Energy Limited
07 December 2022
This announcement contains inside information
7 December 2022
88 Energy Limited
HICKORY-1 EXPLORATION WELL - RIG CONTRACT EXECUTED
Highlights
-- Rig contract executed for drilling of the Hickory-1 exploration well
-- Permitting and planning remain on track for scheduled spud in late-February / early-March 2023
-- Hickory-1 designed to appraise six key reservoir targets and 647 million barrels of oil(1,2)
-- Icewine East renamed Project Phoenix to reflect the new focus
on proven oil-bearing conventional reservoirs
-- Project Phoenix unit application open for public comment, closing 31 December 2022
88 Energy Limited (ASX:88E, AIM:88E, OTC:EEENF) ( 88 Energy or
the Company ) is pleased to announce that it has executed a rig
contract with Nordic-Calista LLC ( Nordic ) for the use of their
Rig-2 to drill the Hickory-1 exploration well on the Alaskan North
Slope.
Hickory-1
The Hickory-1 well is designed to appraise six conventional
reservoir targets within the SMD, SFS, BFF and KUP reservoirs and
647 million barrels of oil(1,2) , with spud scheduled for
late-February / early-March 2023 to a permitted total depth of
12,500 feet. The Hickory-1 well has been significantly de-risked by
recent drilling and flow tests carried out on adjacent acreage by
Pantheon Resources, the interpretation of the Icewine-1 well logs,
the modern Franklin Bluffs 3D seismic data ( FB3D) and AVO
analysis.
An optimal drilling location has been selected adjacent to the
Dalton Highway using the above data. This location intersects and
will test the substantial potential oil volumes noted across all
mapped play fairways, and in particular the SMD, SFS and BFF
reservoirs.
Significant progress has been made on permitting and planning of
Hickory-1 by our appointed project manager, Fairweather, LLC. All
long lead items have been secured and tendering is nearly complete.
Further details of the drilling program and schedule will be
announced by the Company in the lead up to planned spud, which
remains subject to relevant government and other approvals.
Project Phoenix
The Icewine East area has been renamed Project Phoenix to
reflect the Company's refreshed exploration strategy for this
acreage. Since its acquisition in 2014, the acreage targeted the
unconventional HRZ play. Project Phoenix is now focused on the
proven oil-bearing conventional reservoirs that were identified
during the drilling and logging of Icewine-1 and 2, and more
recently that were flow tested by Pantheon Resources. Project
Phoenix is strategically located on the Dalton Highway with the
Trans-Alaska Pipeline System running through the acreage.
The Company has put forward a unit application covering the
Project Phoenix acreage and received notice from the Alaska
Department of Natural Resources ( DNR ) that the application is
open for public comment until 31 December 2022. The DNR will
consider any comments and issue a decision no later than 1 March
2023. The unit approval will extend the leases for Project Phoenix
beyond their primary term and provides an agreed program to assess
commercialisation of the acreage and a pathway to development and
production.
(1) 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.
(2) Mean unrisked resource - Net Entitlement to 88 Energy. Refer
announcement released to ASX on 23 August 2022
About Nordic and Rig-2
Nordic
Nordic Calista, a wholly owned subsidiary of Calista, has been
operating custom build arctic rigs since 1985. Founded in 1972,
Calista Corporation (Calista) is one of the largest of the 13
regional corporations in the state of Alaska.
Rig-2
Rig-2 is a single module, self-propelled drilling rig. The
unique single module design eliminates extended rig up/down
providing significant efficiencies during the winter exploration
season. Rig-2 incorporates a 464k lbs triple mast with a 600HP AC
top-drive.
This announcement has been authorised by the Board.
Media and Investor Relations
88 Energy Ltd admin@88energy.com
Ashley Gilbert, Managing Tel: +61 8 9485 0990
Director
Finlay Thomson, Investor Tel: +44 7976 248 471
Relations
Fivemark Partners
Investor and Media Relations Tel: +61 410 276 744
Andrew Edge/ Michael Vaughan Tel: +61 422 602 720
EurozHartleys Ltd
Dale Bryan Tel: +61 8 9268 2829
Cenkos Securities Plc
Neil McDonald Tel: +44 (0)131 220 6939 / +44
(0)20 7397 8900
Derrick Lee
Pearl Kellie
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, Dr Stephen Staley, who is a
Non-Executive Director of the Company. Dr Staley has more than 35
years' experience in the petroleum industry, is a Fellow of the
Geological Society of London, and a qualified
Geologist/Geophysicist 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. Dr
Staley has reviewed the information and supporting documentation
referred to in this announcement and considers the resource and
reserve 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.
About Project Phoenix
Project Phoenix (88E 75.2% WI) is located on the central North
Slope of Alaska and encompasses approximately 82,846 gross acres.
It is situated on-trend to recent discoveries by Pantheon Resources
Plc (LSE: PANR) in multiple, newly successful play types across
top, slope and bottom-set sands of the Mid Schrader Bluff, Canning
and Seabee formations. Independent mapping has demonstrated that
these plays extend into the Phoenix acreage.
Project Phoenix holds an estimated unrisked conventional total
of 647MMbbl of prospective oil resources (mean unrisked, net to
88E), independently assessed by Lee Keeling and Associates (LKA) in
Q3 2022 (see 88E ASX release dated 23 August 2022). The acreage has
been significantly de-risked by the recent Pantheon drilling and
flow tests on their adjacent acreage to the North, coupled with
data from Icewine-1 well logs (encountered 380 ft of net oil pay
within SMD sands) and a modern 3D seismic data set (FB3D).
Figure 1: Project Phoenix lease area, including mapped play
fairways, Franklin Bluffs 3D area and planned Hickory-1 well
location (subject to permitting, as well as JV and Government
approvals).
Phoenix: Alaska North Unrisked Net Entitlement to 88E (1,6) Prospective
Slope Oil Resources (MMstb) (4,5)
-------------------------- ----------------------------------------------------------
Prospects (Probabilistic Low (1U) Best (2U) High (3U) Mean COS(3)
Method)
-------------------------- ---------- ----------- ----------- ----------- -------
Shelf Margin Delta (SMD
A, B & C) 44 140 326 145 81%
-------------------------- ---------- ----------- ----------- ----------- -------
Slope Fan Set (SFS) 24 84 217 89 50%
-------------------------- ---------- ----------- ----------- ----------- -------
Basin Floor Fan (BFF) 75 341 930 358 50%
-------------------------- ---------- ----------- ----------- ----------- -------
Kuparuk (KUP) 24 56 98 56 72%
-------------------------- ---------- ----------- ----------- ----------- -------
Prospects Total 167 621 1,570 647 (2)
-------------------------- ---------- ----------- ----------- ----------- -------
1. 88 Energy net resources have been calculated using a 75.227%
working interest and a 16.5% royalty.
2. The unrisked means, which have been arithmetically summed,
are not representative of expected total from the prospects and
implies a success case in all reservoir intervals. 88 Energy
cautions that the arithmetically summed 1U estimate may be a
conservative estimate and the arithmetically summed 3U estimate may
be optimistic when compared to a statistical aggregation of
probability distributions.
3. COS represents the geological chance of success as assessed
by 88 Energy and reviewed and endorsed by LKA.
4. Prospects are subject to a phase risk (oil vs gas). Chance of
oil has been assessed as 100% for all targets except for the
Kuparuk Formation which has been assessed as 70%. Phase risk has
not been applied to the unrisked numbers.
5. The Prospective Resources have not been adjusted for the
chance of development. Quantifying the chance of development (COD)
requires consideration of both economic and other contingencies,
such as legal, regulatory, market access, political, social
license, internal and external approvals and commitment to project
finance and development timing. As many of these factors are
outside the knowledge of LKA they must be used with caution.
6. Please refer to ASX announcement dated 23 August 2022 for
further details in relation to the prospective resources estimate
and associated risking with Phoenix.
Cautionary Statement: The estimated quantities of petroleum that
may potentially be recovered by the application of a future
development project(s) relate to undiscovered accumulations. These
estimates have both an associated risk of discovery and a risk of
development. Further exploration appraisal and evaluation is
required to determine the existence of a significant quantity of
potentially recoverable hydrocarbons.
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