REG - 88 Energy Limited - Hickory-1 Well Spudded

88 EnergyAnnouncement

10/03/2023 07:00

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RNS Number : 5612S  88 Energy Limited  10 March 2023

This announcement contains inside information

 

 

88 Energy Limited

Hickory-1 Well Spudded

Highlights

·   Drilling of the Hickory-1 exploration well has commenced.

·   Initial surface hole to be drilled to ~3,500 feet, cased and BOP system
tested.

·   Hickory-1 well is designed to appraise up to six conventional reservoir
targets within the SMD, SFS, BFF and KUP reservoirs and 647 million barrels of
oil(1,2).

 

88 Energy Limited (ASX:88E, AIM:88E, OTC:EEENF) (88 Energy or the Company) is
pleased to report that Nordic Calista's Rig-2 commenced drilling of the
Hickory-1 exploration well, located in Project Phoenix on the North Slope of
Alaska, on the evening of the 9(th) of March 2023 (Alaska time).

Hickory-1 is designed to appraise up to six conventional reservoir targets
within the SMD, SFS, BFF and KUP reservoirs and 647 million barrels of
oil(1,2), and is permitted to a total depth (TD) of up to 12,500 feet. The
primary targets for Hickory-1 are the 3 SMD reservoirs (SMD-C, B and A), with
SFS and BFF reservoirs considered secondary targets. The KUP reservoir is a
tertiary target and will be drilled subject to remaining time in the season,
borehole conditions and other technical considerations.

Hickory-1 is planned to be initially drilled to 3,500 feet, with surface
casing installed and the Blow-Out Preventer (BOP) system tested. This is
anticipated to collectively take up to two weeks. Drilling to TD is then
expected to take a further two weeks, including logging while drilling (LWD),
at which point wireline logging is scheduled. LWD and mudlogging will provide
initial indications as to the prospectivity of the Hickory-1 targets. The
wireline program has been specifically designed to collect essential data,
necessary to optimise the future flow testing program. This includes multiple
side wall coring runs and other specialised tools to enable detailed reservoir
characterisation.

Flow testing of the Hickory-1 well is planned to be undertaken during the
2023/24 winter season, subject to well results. This provides ample time
post-drilling to optimise the flow test program, design, permitting and
implementation.

(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

 

Figure 1: Hickory-1 well designed to test up to 6 stacked targets.

 

 

Figure 2: Nordic Calista Rig-2 and facilities at the Hickory-1 wellsite.

 

 

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                      Tel: +61 410 276 744

Andrew Edge / 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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