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88 Energy to test conventional acreage in Alaska in February

Snapshot

The FTSE 250 group will pay the full costs of an appraisal well, dubbed “Charlie-1”, up to a total of US$23mln to test Malguk-1 discovery

88 Energy Ltd -

Quick facts: 88 Energy Ltd

Price: 0.95 GBX

AIM:88E
Market: AIM
Market Cap: £67.54 m
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  • 88 Energy owns a number of conventional and shale prospects in Alaska

  • Premier Oil has farmed-in to the conventional assets at Icewine project and will fund an appraisal well

  • Icewine contains a potential one billion of net prospective resources just in the conventional assets


What it owns

Project Icewine, Alaska

The operator on the majority of 528,000 contiguous acres onshore Alaska in proven oil province, of which 349,000 acres are net to 88 Energy through a 66% working interest, a 10-year leasehold and16.5% royalty

The opportunity comprises unconventional acreage and conventional opportunity on the North Slope

Yukon Gold, Alaska

The recent award of 14,194 acres (100% 88 Energy); Contains historic oil discovery assessing 3D seismic

Western Blocks, Alaska

88 Energy Limited (LON:88E) earning 36% by paying 40% of costs for a commitment well on a 400MMbbl prospect; adjacent to recent discoveries

How it's doing

A farm-in deal with Premier Oil (LON:PMO) for the conventional acreage at Icewine will see the FTSE 250 group pay the full costs of an appraisal well, dubbed “Charlie-1” up to a total of US$23mln, to assess the Malguk-1 discovery made by BP in 1991.

Malguk-1 discovered 251 feet of light oil pay in turbidite sands but was never tested.

Premier estimates an accumulation of more than one billion barrels of oil in place, based on the original well data and its evaluation of the existing 3D dataset.

88 will retain a 30% stake in Area A, with Charlie-1 holding an estimated 63mln barrels net.

On successful completion of the work programme, Premier will have the option to assume operatorship.

Should the Charlie-1 appraisal well prove successful, Premier has the option to earn a 50% working interest in Area B or Area C through spending a further US$15mln.

In January 2020, 88 said approval to drill has been submitted and is expected this month, with drilling scheduled to start in February and flow testing to conclude in April.

Charlie-1 will intersect seven stacked prospects, four of which are considered appraisal targets.

The total Gross Mean Prospective Resource across the seven stacked targets to be intersected by Charlie-1 is 1.6 bn barrels of oil (480mln barrels net to 88E).

What the boss says: Dave Wall, managing director

"Drilling Charlie-1 will be a pivotal moment for the company as it seeks to unlock the large potential of the conventional plays on the acreage.”

Inflexion points

  • 88 raised A$6.75mln (£3.6mln) in September
  • The plan is to drill the Charlie well, an appraisal of a 1991 BP discovery, in February.
  • If the Charlie well impresses, Premier can add 50% stakes in Icewine Area B and Area C for US$15mln
  • Industry interest on the North Slope is high ConocoPhillips, ENI, Repsol and Oil Search are all working in the region.

 

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Investor Update: 88 Energy completes Premier Oil farm-out in Alaska

Headlines from the Proactive UK newsroom. 88 Energy (LON:88E) has completed its farm-out with Premier Oil for its acreage in Alaska. The Alaska Department of Natural Resources has also approved the Plan of Operations for the Charlie-1 appraisal well with spudding scheduled for next...

on 27/11/19

3 min read