REG - 88 Energy Limited - Hickory-1 Well Flow Test Planning Update

88 EnergyAnnouncement

21/09/2023 07:00

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RNS Number : 1159N  88 Energy Limited  21 September 2023

This announcement contains inside information

 

88 Energy Limited

HICKORY-1 WELL FLOW TEST PLANNING UPDATE

Highlights

·   Hickory-1 flow test to assess 647 million barrels of oil
resources.(1,2)

·   Upper Slope Fan System (Upper SFS) mapping complete, with reservoir
zone more laterally extensive than previously considered. Resources in this
zone have not yet been estimated and are additional to the pre-drill estimates
referred to above.

·   Stimulation and flow test modelling for each of the target intervals in
Hickory-1 now complete.

·   Rig-111 secured for flow test and ordering of long lead flow test items
underway.

·   Flow test planning and permitting remains on schedule with operations
set to commence as early as possible in Q1 2024 in the Alaskan winter
operational season.

88 Energy Limited (ASX:88E, AIM:88E, OTC:EEENF) (88 Energy or the Company) is
pleased to announce that mapping of the recently identified Upper Slope Fan
System (Upper SFS) across its Project Pheonix acreage has been finalised.
Seismic interpretation and log correlation has revealed that the Upper SFS
reservoir is more extensive than originally mapped, correlating over 4 miles
(7km) to strong shows in the Icewine-1 well (previously interpreted/attributed
to be part of the lower SMD-A package). Resources in this reservoir are not
currently included in the Company's resource estimates as they have yet to be
assessed.

The Upper SFS target remains an untested reservoir in nearby offset wells. The
quality and strength of shows recorded during the drilling and logging of
Hickory-1 remain amongst the best the Company has witnessed to date.
Moreover, post-well geochemical analysis of Hickory-1 sidewall core data
indicate fluid maturity to be in the early-peak oil window.

Figure 1: Mapping of the Upper SFS target indicates reservoir is more
extensive than originally thought, correlating over 4 miles (7km) to strong
shows in the Icewine-1 well.

 

(1) 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.

(2) Mean unrisked resource - Net Entitlement to 88 Energy. Refer announcement
released to ASX on 23 August 2022. Resources estimated pre-Hickory-1 drilling.

 

 

Figure 2: Mapping of the Upper SFS reservoir correlating to strong shows in
the Icewine-1 well.

 

Industry leading simulation models have been built for each of the target
intervals in Hickory-1, with the objective of ensuring a successful
stimulation and flow test in each zone. The Hickory-1 simulation models
incorporate high quality offset well data and operational lessons learnt in
the area. As is typical for early stage appraisal and development operations,
the largest gains in understanding are achieved in the initial stages of
activity and analysis, with 88 Energy set to benefit from neighbouring
 offset well test results. As previously reported, Pantheon Resources have
announced flow rates of 50-100 BOPD from a number of vertical wells and
intervals in the adjacent northern acreage.

 

These vertical test results, although modest, provide critical information in
understanding the reservoirs   and also allow the design of long, horizontal
wells that would be employed in any development scenario. Using unconventional
completion techniques, horizontal development wells typically achieve 6-12
times the flow rates seen in vertical wells in analogue fields in the Texas
Lower 48.

 

Figure 3: Imaged of modelled stimulation test designs and results.

Post-well analysis and flow test modelling of the Hickory-1 reservoirs have
enabled accurate calculation of the quantum of completion fluids as well as
the design of the completion string necessary for flow test operations.
Sourcing and procurement of these long lead items is underway with operations
scheduled for early Q1 2024.  Permitting is on track with the Alaskan state
authorities and All American Oilfield's recently upgraded Rig 111
drilling/workover module has been secured for the flow test program.

 

 

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

 Fivemark Partners, Investor and Media Relations
 Michael Vaughan                                       Tel: +61 422 602 720

 EurozHartleys Ltd
 Dale Bryan                                            Tel: + 61 8 9268 2829

 Cavendish Securities Plc                              Tel: + 44 (0)207 908 6000
 Derrick Lee                                           Tel: +44 (0)131 220 6939
 Pearl Kellie                                          Tel: +44 (0)131 220 9775

 

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. Hickory-1 results and
independent mapping have demonstrated that these plays extend into the Phoenix
acreage.

Project Phoenix holds an estimated unrisked conventional total of 647MMbbl of
prospective oil resources (pre-drilling, 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 was 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).

Project Phoenix is strategically located on the Dalton Highway with the
Trans-Alaska Pipeline system running through the acreage providing an
immediate export route and expediting future development.

 

Figure 4: Project Phoenix lease area, including mapped play fairways, Franklin
Bluffs 3D area and 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.    These pre-drilling resources estimates are net to 88 Energy and 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). The pre-drilling
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.

7.    It should be noted that the prospective resources and COS values were
calculated prior to the drilling of Hickory-1.

 

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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