TIDM88E
RNS Number : 7196I
88 Energy Limited
16 August 2021
This announcement contains inside information
16 August 2021
88 Energy Limited
Merlin-1 well confirms light oil with appraisal well planned for
Q1 2022
Highlights
-- Merlin-1 post well evaluation successfully demonstrates
presence of oil in the N20 and N18 targets; plus a new target (N19
) was penetrated ;
-- 41 feet of net log pay interpreted across the three reservoir intervals;
-- Geochemical analysis determined oil with an esti mated API
gravity between mid-30 to low-40 API (light oil);
-- Merlin-1 results incorporated into an updated Project
Peregrine independent unrisked net entitlement mean total
Prospective Resource estimate of 1.6 billion barrels * with
Merlin-2 geological chance of success assessed as 56%; and
-- Merlin-2 appraisal drilling locations identified to the east
of Merlin-1 where enhanced reservoir thickness and quality
expected, with appraisal drilling planned for Q1 2022.
88 Energy Limited (ASX:88E, AIM:88E, OTC:EEENF) ( 88 Energy or
the Company ) is pleased to announce that the post-well evaluation
of the Merlin-1 well (which was drilled in March 2021 to a depth of
5,267 feet) has successfully demonstrated the presence of oil in
multiple stacked sequences in the Cretaceous Nanushuk Formation
(N20 and N18 targets). An additional new target, the N19 sand, that
was not previously mapped, also returned a strong hydrocarbon
signature following geochemical analysis.
Wireline analysis and core data correlate to 41 feet of net log
pay across the 3 reservoir intervals. In addition, results of the
post well formation evaluation, including core and Reservoir
Description Tool ( RDT(TM) ) data have determined the presence of
moveable hydrocarbons. Geochemical analysis of the cores has
determined the presence of a light oil with an estimated API
gravity between mid-30 to low-40 API .
Given the up-dip location of the Merlin-1 well with respect to
the N20, N19 and N18 reservoirs, hydrocarbon shows and sand quality
at this location was consistent with pre-drill expectations. 88
Energy has identified appraisal drilling locations to the east of
the Merlin-1 well, closer to the shelf break, where enhanced
reservoir thickness and quality are expected.
Post well analysis has also determined that the N14 horizon, one
of the targets of the Merlin-1 well, was not intersected, as it is
believed to lie below the total depth of the well. The N14 prospect
remains a target of interest and the Merlin-1 well may be
re-entered in order to test this prospective target as part of the
Company's future drilling activities at Project Peregrine.
An independent oil and gas reservoir evaluation consultancy,
ERCE Australia Pty Ltd ( ERCE ), has conducted an updated
assessment of the Project Peregrine prospective resources post the
Merlin-1 well results. The updated prospective resource estimates
and risking assessments for Project Peregrine (see Table 1) are
noted below:
Table 1: Revised Project Peregrine Prospective Resources
Project Peregrine: Alaska North Unrisked Net Entitlement to 88E (1,
Slope 4) Prospective Oil Resources (MMstb)
Prospects (Probabilistic Calculations) Low (1U) Best High Mean COS (3)
(2U) (3U)
---------
Merlin-2 (Nanushuk - N20, N19
and N18) 64 329 1,467 652 56%
========= ====== ====== ========= ========
Merlin-1A (Nanushuk - N14S) 25 87 282 132 17%
======================================== ========= ====== ====== ========= ========
Harrier (Nanushuk) 41 175 796 353 24%
======================================== ========= ====== ====== ========= ========
Harrier Deep (Torok) 35 226 1,132 486 20%
======================================== ========= ====== ====== ========= ========
Prospects Total 1,624(2)
---------------------------------------- --------- ------ ------ --------- --------
1. The Prospective Resources presented here are the result of a
risked probabilistic aggregation of the individual stacked
prospective layers in each prospect; the success case estimates
present the distribution of possible outcomes in the event that at
least one prospective layer is successful.
2. Unrisked mean total is not representative of the expected
total from the four prospects and assumes a success case in all
four wells.
3. COS represents the geological chance of success of at least
one of the stacked layers which comprise each prospect. This
excludes phase risk which ERCE has estimated to be 70% oil (30%
gas). The Prospective Resources have also not been adjusted for the
chance of development, which is estimated by 88 Energy to be 60%
(including phase risk), ERCE sees this as reasonable based on the
data available. Quantifying the chance of development (COD)
requires consideration of both economic contingencies 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 out-with the knowledge of ERCE they must be used with
caution..
4. Gross Prospective Resources include off-block volumes over
which 88 Energy has no mineral rights. Net working interest
Prospective Resources are based on the on-block volumes and 88
Energy's 100% working interest. Net entitlement Prospective
Resources are the net working interest Prospective Resources less
royalties payable to others. The net entitlement interest to 88
Energy is calculated as 84.7% of net working interest after
deduction of state royalty (12.5%) and overriding royalty interests
(1.3%and 1.5%).
*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.
88 Energy is the operator of Project Peregrine and holds a 100%
working interest in the acreage.
A detailed summary presentation of the Merlin-1 well results and
analysis can be found in the attached pdf
http://www.rns-pdf.londonstockexchange.com/rns/7196I_1-2021-8-16.pdf
88 Energy Managing Director, Ashley Gilbert, commented:
"We are thrilled with the results from the Merlin-1 exploration
well. This is the best well we've drilled on the North Slope of
Alaska to date, with light oil detected in the Nanushuk across
three separate horizons. Whilst we have a lot more work to do, the
Merlin-1 well has confirmed an active petroleum system in the
Peregrine acreage. Results of this significance, together with the
magnitude of the opportunity, merit a pace of evaluation that
facilitates further drilling and seismic in upcoming winter
seasons."
"The company is advancing planning for an appraisal well
following the Merlin-1 well, which is scheduled for the Alaskan
winter drilling window in Q1 2022."
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 100% 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. Fluids recovered via downhole sampling from three Lower
Grandstand units has confirmed, through laboratory analysis, to be
primarily water, though carbon isotope analysis of these fluids
deemed the respective source rocks to be in the oil window. Note:
the most prospective zones in the Merlin-1 well, namely N20, N19
and N18, were not able to be sampled due to operational issues.
Media and Investor Relations:
88 Energy Ltd
Ashley Gilbert, Managing Director
Tel: +61 8 9485 0990
Email:investor-relations@88energy.com
Finlay Thomson , Investor Relations Tel: +44 7976 248471
Fivemark Partners , Investor and Tel: +61 410 276 744
Media Relations Tel: +61 422 602 720
Andrew Edge / Michael Vaughan
EurozHartleys Ltd Tel: + 61 8 9268 2829
Dale Bryan
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, 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.
The Merlin-1 well was spudded in March 2021 with drilling
operations completed in April 2021. Interpretation of results was
completed in August 2021 with post well evaluation successfully
demonstrating the presence of oil in N20, N19 and N18 targets, with
41 feet of net log pay across the three reservoir intervals noted
and geochemical analysis determined the oil to have an estimated
API gravity between mid-30 to low-40 API (light oil).
A second well, the Merlin-2 appraisal well, is planned to be
drilled in Q1 2022 as a follow up well to the Merlin-1 exploration
well which is targeting a net entitlement mean Prospective Resource
of 652 million barrels (unrisked).
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