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88 Energy says does not expect any cost for Charlie well, fresh farm-out eyed

Earlier this well the company revealed disappointing results from the Charlie-1 well

88 Energy Ltd - 88 Energy doesn’t expect any cost for Charlie well, fresh farm-out eyed

88 Energy Ltd (LON:88E) has repeated that it does not expect to incur any costs from the drilling of the Charlie-1 well, which saw “mixed” results.

In a quarterly activities update, 88 Energy also said it would launch a new partnership programme for the Charlie asset.

Whilst partner Premier Oil PLC (LON:PMO) has chosen to exit the project, AIM-quoted 88 Energy confirmed that US$23mln was deposited into the joint venture bank account (in accordance with the JV deal) and the well costs remain within the expected budget.

READ: 88 Energy to wrap-up Charlie-1 testing due to “mixed” results

Charlie-1 is being plugged and abandoned after it found its primary target “poorly developed” although it also encountered a condensate discovery and other horizons with some potential.

The well had originally targeted in excess of 1bn barrels of prospective resources.

88 Energy, which until recently had been focused on the HRZ shale, noted that it would now also analyse these horizons in the Charlie well data.

“Detailed logs and sidewall cores were also acquired in the HRZ formation during drilling of the Charlie-1 well, which will now be analysed over the coming months,” the company said.

“The HRZ remains a viable target and options to commercialise this potentially large resource continue to be pursued.”

The company also noted that talks are continuing over its separate Yukon leases, located nearby, which host the Cascade prospect (estimated at around 89mln barrels).

Permitting activities are underway here, and 88 Energy said it is planning for a 2021 well, subject to a farm-out transaction.

Quick facts: 88 Energy Ltd

Price: 0.375 GBX

Market: AIM
Market Cap: £33.51 m

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