TIDM88E
RNS Number : 4609U
88 Energy Limited
06 April 2021
6(th) April 2021
This announcement contains inside information
88 Energy Limited
Operations Update
88 Energy Limited ("88 Energy" or the "Company", ASX:88E,
AIM:88E, OTC:EEENF) is pleased to provide the following update
related to its operations in the NPR-A region of the North Slope of
Alaska.
Highlights
-- Initial petrophysical interpretation indicates several potential pay zones in Merlin-1
-- New prospective horizon identified at Project Peregrine
-- Operational issues prevent hydrocarbon samples from two most prospective zones
Details
The first run of the wireline program included a standard triple
combination log with nuclear magnetic resonance ("NMR"). These
tools are designed to identify potential reservoir and resistivity
(elevated resistivity is an indication of hydrocarbon saturation)
as well as provide an estimate of the mobility of the fluid
present. Multiple prospective zones were identified, consistent
with the shows and logs obtained whilst drilling, and the NMR tool
indicated good mobility across most of these zones.
The second run of the program was designed to take samples
across these zones. Initial observations indicated the presence of
an oil signature in the fluid using an optical fingerprint sensor
in the downhole sampling tool, after communication was established
with the reservoir in the deepest zone of interest. Slugging of
hydrocarbon and water then occurred, which is often a precursor to
hydrocarbon flow from the reservoir, however; a power outage due to
equipment failure necessitated pulling out of the hole for repairs
prior to any sample being obtained. After repairs were completed,
the run back in hole encountered several sticky sections,
indicating poor hole condition so a clean out run was undertaken.
Re-entry with the sampling tool was then executed to move to the
lowest zone for testing but good communication was not able to be
re-established with the reservoir despite observation of a similar
hydrocarbon signature on the optical fingerprint sensor. The time
the hole had been open and consequent potential formation damage
may have contributed to this issue.
A decision was made to move to the next shallowest prospective
zone, which had exhibited good oil shows and petrophysical
characteristics, but wellbore condition issues prevented a test as
the tool became stuck. The tool was freed but the risk of returning
to that zone was deemed too high.
Not being able to sample these two most prospective zones does
not preclude a discovery; however, analysis of sidewall cores and
potentially further drilling may be required for confirmation.
Significantly, one of these zones is considered to be a new
prospective horizon within the Nanushuk Formation that may be
wholly within the Project Peregrine acreage and was not one of the
pre-drill targets. The other zone is interpreted to be shared with
one of the zones in the Harrier prospect, to the north of Merlin.
Further work, integrating the results from logging with the
seismic, is required to map / re-map the volumetric potential of
these zones.
Several samples were taken in zones interpreted to be less
prospective on the way out of the hole, all of which contained low
saturations of hydrocarbons, which will now be sent to a laboratory
for testing. The presence of hydrocarbons in these zones is
considered encouraging for regional prospectivity but does not
constitute a discovery due to the low saturation levels.
It is now too late in the season to initiate flow testing
operations and the forward program will consist of plugging the
well. The well may be re-entered in the future, if warranted, in
order to drill a side track and conduct a flow test.
Additional information related to Merlin-1:
Merlin-1 is located in the NPR-A region of the North Slope of
Alaska with the following co-ordinates X:196695 Y: 5666711 Zone 4
NAD 27. 88 Energy has a 50% working interest in the well and is
Operator. The well was spud on 10(th) March 2021 and was drilled to
a Total Depth of 5,267'. Multiple prospective pay zones in
sandstone reservoir between depths of 3,400' and 5,100' have been
identified; however, more analysis of the data is required to
determine gross and net pay. Fluids recovered via downhole sampling
will now be sent to a laboratory to determine hydrocarbon
saturation, phase and constituents; they, however, are deemed to be
mostly comprised of water. Note: the two most prospective zones in
the Merlin-1 well were not able to be sampled due to operational
issues.
Managing Director, David Wall, commented: "Despite the
operational issues that prevented obtaining a hydrocarbon sample
from the two most prospective zones, the results from the Merlin-1
well are very encouraging for the potential at Project
Peregrine.
We appreciate that these early results may be difficult to
interpret. That is because we do not yet have all the data required
to allow interpretation. This means some uncertainty remains;
however, it is already clear that Merlin-1 has delivered by far the
best outcome of any of the 5 wells drilled by 88 Energy in Alaska
over the last 6 years.
Particularly encouraging is the apparent presence of oil in a
zone that has not previously been targeted in NPR-A. Whilst the
potential volumetric size of this zone is not yet known (as it was
not a mapped target in Merlin-1) the formation could be extensive
based on initial interpretation. The other most prospective zone
with good shows and petrophysical characteristics is shared with
the Harrier Prospect and will likely high grade that for drilling
in 2022.
The Company is extremely proud to have been able to achieve this
result from a wildcat exploration well drilled on sparse 2D
seismic, 60kms from the nearest control well, in the middle of the
Arctic winter.
Project Peregrine, in combination with the 100% owned Umiat Oil
Field, has the potential to deliver substantial returns for
shareholders, in the form of a potentially large oil field
development.
We look forward to providing more data as it becomes available
over the next few weeks and months."
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 Peregrine
Project Peregrine is located in the NPR-A region of the North
Slope of Alaska and encompasses 195,000 contiguous acres. It is
situated on trend to recent discoveries in a newly successful play
type in topset sands in the Nanushuk formation. 88 Energy has a
100% working interest in the project that will reduce to 50% post
the completion of funding as part of a recent farm-in, whereby 88E
is carried on the first US$10m (of an initially estimated US$12.6m
total cost) for the Merlin-1 well.
The Merlin-1 well was spudded in March 2021 and is targeting 645
million barrels of gross mean prospective resource(#) . Wireline
logging at Merlin-1 is almost complete. A second well, Harrier-1,
is planned to be drilled in 2022 and is targeting gross mean
prospective resource of 417 million barrels(#) .
Independent Resource Assessment(#)
Project Peregrine: Alaska Unrisked Net Entitlement to 88E Prospective
North Slope Oil Resources (MMstb)
Prospects (Probabilistic Low Best High Mean COS
Calculations) (1U) (2U) (3U)
----------
Merlin (Nanushuk) 41 270 1,463 645 37%
========== ========== ========= ========= ======
Harrier (Nanushuk) 48 207 940 417 24%
=========================== ========== ========== ========= ========= ======
Harrier Deep (Torok) 42 267 1,336 574 20%
=========================== ========== ========== ========= ========= ======
Prospects Total 1,636
--------------------------- ---------- ---------- --------- --------- ------
(#) Please refer to release dated 23 February 2021 for full
details with respect to the Prospective Resource estimate,
associated risking and applicable Cautionary Statement.
Each of the Merlin and Harrier prospects is located on trend to
an existing discovery, in the same play type (Nanushuk topsets).
This has de-risked the prospects considerably and resulted in a
relatively high independently estimated geologic chance of
success.
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 announcement has been authorised by the Board.
The below graphics can be found in the pdf version of this
announcement available from the Company's website;
o Figure 1: Project Peregrine and Recent Nanushuk Discoveries
o Figure 2 : Merlin-1 - on trend to large Willow oil field
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
EurozHartleys Ltd
Dale Bryan Tel: + 61 8 9268 2829
Cenkos Securities Tel: + 44 131 220 6939
Neil McDonald / Derrick Lee
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