REG - 88 Energy Limited - Hickory-1 Operations Update

88 EnergyAnnouncement

29/03/2023 07:15

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RNS Number : 6000U  88 Energy Limited  29 March 2023

This announcement contains inside information

 

88 Energy Limited

Hickory-1 Operations Update

Highlights

·    Hickory-1 has successfully intersected and drilled through the SMD-A,
B and C reservoirs.

·    Initial interpretation of logging-while-drilling data, together with
the noted oil shows, elevated mud gas readings, high resistivity signatures
and crossover of neutron density curves have indicated potential hydrocarbon
pay.

·    The Nordic Callista Rig-2 will continue to drill ahead into the
secondary reservoirs, through to TD at approximately 11,000 feet which is
anticipated to take a further 3-5 days.

88 Energy Limited (ASX:88E, AIM:88E, OTC:EEENF) (88 Energy or the Company) is
pleased to report that the Hickory-1 exploration well is drilling ahead after
successfully intersecting the SMD-A, B and C reservoirs. The current depth of
the well is approximately 8,820 feet as at 17:30 Alaska time on 28 March 2023.

All three primary SMD reservoir targets were intersected slightly shallower
than prognosed depths, with reservoir thicknesses consistent with pre-drill
interpretation.

Logging-while-drilling (LWD/MWD) data collected over the primary targets has
indicated potential hydrocarbon pay that will be further assessed by the
wireline logging and coring program. This program is set to commence
immediately after the well reaches Total Depth (TD).

The presence of hydrocarbons was evidenced by fluorescence under ultraviolet
light in cuttings samples. Reservoir permeability was also indicated by
"immediate and streaming" blue-white "cuts" when solvent was applied. Elevated
C3-C5 mud gas readings were observed as well as high resistivity signatures
and crossover of neutron density curves, providing further indications of
potential hydrocarbon pay.

Given the results in the primary SMD targets, and to preserve borehole
condition (in-line with previous commentary around well execution strategy),
the decision has been made to TD after drilling through the secondary SFS and
BFF reservoir targets but prior to the smaller and lower priority tertiary
Kuparuk (KUP) reservoir target. The KUP target at Project Phoenix is planned
to be assessed at a later date, subsequent to the proposed flow testing of the
Hickory-1 exploration well which is scheduled for the 2023 / 24 Alaskan winter
operational season.

It is expected that it will take a further 3-5 days to drill through the
secondary SFS and BFF reservoir targets. Shortly thereafter, the well is
expected to reach TD at approximately 11,000 feet.

 

 

Immediately post the well reaching TD, the Nordic Callista Rig-2 will commence
pulling out of hole and wireline logging preparations will commence. The
logging program is expected to take between 5-7 days, after which the
Hickory-1 well is planned to be cased and suspended. All operations, including
suspension and demobilisation from the well site, are expected to be completed
around mid-April.

The Company expects to provide a further update on progress at Hickory-1 after
reaching TD.

( )

This announcement has been authorised by the Board.

 

 

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 Media Relations

Michael
Vaughan
                             Tel: +61 422 602 720

 

EurozHartleys Ltd

Dale
Bryan
Tel: + 61 8 9268 2829

 

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 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.

 

 

 

 Phoenix: Alaska North Slope            Unrisked Net Entitlement to 88E (1,6) Prospective Oil Resources (MMstb) (4,5)
 Prospects (Probabilistic Method)       Low (1U)          Best (2U)         High (3U)         Mean              COS(3)
 Shelf Margin Delta (SMD A, B & C)      44                140               326               145               81%
 Slope Fan System (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 movable hydrocarbons.

 

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