REG - 88 Energy Limited - Hickory-1 Well To Proceed to Flow Testing

88 EnergyAnnouncement

11/04/2023 07:00

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RNS Number : 7199V  88 Energy Limited  11 April 2023

This announcement contains inside information

11 April 2023

 

88 Energy Limited

Hickory-1 Well To Proceed to Flow Testing

Highlights

·    Wireline programme successfully completed on the Hickory-1 well.

o Initial petrophysical interpretation confirmed presence of multiple
hydrocarbon bearing pay zones across all pre-drill targets, in addition to the
new Upper SFS reservoir identified.

o Estimated net pay calculated from wireline data of approximately 450 feet
over all pay zones (gross pay estimated to be over 2,000 feet).

o Average total porosity across all zones of 9-12%, including key zones
identified for potential testing in the Upper and Lower SFS with between
11-16% total porosity.

o Pre-drill expectations met or exceeded on reservoir quality (higher than
expected porosity in SFS and BFF) and thickness (higher total gross reservoir,
total net reservoir and total net pay).

·    Post-well analysis of cores and wireline data now set to commence,
including assessment and classification of resources across all reservoirs
including maiden resource estimates for the Upper SFS reservoir.

·    Multiple zones in Hickory-1 planned to be to flow tested, all of
which possess similar reservoir characteristics to wells that have flowed on
adjacent acreage.

·    Hickory-1 to be cased and suspended in preparation for carrying out
flow test programme as early as possible in the 2023/2024 winter operational
season; preliminary planning has already commenced including identification of
suitable rigs to undertake the work.

88 Energy Limited (ASX:88E, AIM:88E, OTC:EEENF) (88 Energy or the Company) is
pleased to report that the Hickory-1 wireline logging suite and sidewall
coring programme has been successfully completed. This programme has confirmed
the preliminary petrophysical interpretation from LWD (logging while drilling)
data of the presence of multiple hydrocarbon bearing zones across all
pre-drill targets, as well as the new Upper SFS reservoir.

The sophisticated wireline logging and sidewall coring programme consisted of
5 runs which included the Triple Combo, NMR/XMR, Dielectric Scanner, Dipole
Sonic and Side Wall Coring (SWC) tools. The focus of the wireline logging
programme was to:

-     validate the preliminary petrophysical interpretation of multiple
pay zones identified during drilling from LWD logs; and

-     obtain data to optimally design and plan a targeted flow test of
Hickory-1.

Both goals were successfully achieved.

Interpretation of wireline data has confirmed the following preliminary
petrophysical assessment:

-     an estimated gross pay of over 2,000 feet and a calculated net pay
of approximately 450 feet over all zones in the well; and

-     average total porosity across all pay zones of 9-12%, including key
zones identified for potential testing in the SFS and Upper SFS with between
11-16% total porosity.

Pre-drill expectations were met or exceeded on reservoir quality (higher than
expected porosity in SFS and BFF) and thickness (higher total gross reservoir,
total net reservoir and total net pay).

Side wall coring (SWC) was also performed over all reservoir intervals with
samples recovered to surface. The retrieved SWC fluoresced under ultraviolet
light in numerous cores over the SMD, SFS and BFF, and visible porosity was
also confirmed in the SWC. These core samples will now be transported to a lab
in Anchorage for further analysis.

Figure 1: SWC sample retrieved from Hickory-1 showing fluorescence.

 

In addition, a preliminary petrophysical comparison of Hickory-1 prospective
zones against the interval that flowed oil in Pantheon's Alkaid-1, has
indicated favourable potential for successful flow tests from multiple zones
in the Hickory-1 well.

Pantheon's wells on the adjacent northern acreage - Alkaid-1, Alkaid-2,
Talitha-A and Theta West-1 - have all flowed 35 to 40⁰ API oil from similar
sandstones, with testing confirming reservoir deliverability of light, sweet
oil (see Pantheon releases of 7 February and 21 February 2022).

Figure 2: Hickory-1 has intersected all primary and secondary targets, and the
newly identified Upper SFS reservoir, prior to calling TD within the HRZ to
preserve hole conditions.

 

Forward Plan

 

Hickory-1 will now be cased and suspended in preparation for flow testing,
which is set to be undertaken as early as possible in the 2023/2024 winter
season. A detailed evaluation of all the data obtained from the Hickory-1
drilling and wireline logging programmes will be undertaken in order to plan
the optimal flow test programme. It is expected that a light-weight rig can be
utilised to complete these operations in the next winter season and the
Company has commenced discussions with rig providers to complete this work.

The Nordic Calista Rig 2 is currently running 7" casing ahead of suspending
the well. The remaining program is anticipated to take 5-7 days prior to Rig-2
rigging down and being released from site, signifying the end of 88 Energy's
2022/2023 winter drilling campaign.

The Company is excited by the results of this phase of the campaign and eager
to return during the 2023/2024 winter season for flow testing of Hickory-1.

88 Energy will provide further information as the analysis of the well results
progresses and will release details of the flow test programme and the future
work programme for Project Phoenix when this information is available.

 

Managing Director, Ashley Gilbert, commented:

"We are excited about the results to date from the Hickory-1 well, and
particularly encouraged by the identification of multiple pay zones across the
primary and secondary targets.

The results have confirmed or exceeded our pre-drill expectations with regard
to the primary and secondary targets, and also identified the new Upper SFS
reservoir, which is very pleasing for both the Company and its shareholders.
We are now fully focused on demobilisation and safe completion of the current
phase of the Hickory-1 well, in parallel with early planning actions for the
next phase of operations at Hickory-1: scheduled flow testing as early as
possible in the 2023/24 winter operational season in Alaska.

We are particularly encouraged by the fact that wells in the immediately
adjacent northern acreage have flowed and recovered light oil to surface from
all of the SMD, SFS and BFF reservoirs, which bodes particularly well for our
planned testing programme next season.

We look forward to updating shareholders with post well analysis results and
our plans for the flow test of the Hickory-1 well, along with an updated
assessment and classification of resources at Project Phoenix."

 

Additional information related to Hickory-1:

Hickory-1 is located in State lands on the North Slope of Alaska, adjacent to
the Dalton Highway and Trans Alaska Pipeline, within Alaskan Oil and Gas lease
ADL 392314. 88 Energy holds a ~75% working interest in the well and is
Operator. The well spudded on 9 March 2023 and was drilled to a Total Depth of
10,650 feet. Multiple prospective pay zones in sandstone reservoir between
depths 7,700 and 10,500 have been identified. However more analysis of the
data is required to confirm and refine gross and net pay.  SWC's recovered
will be sent to a laboratory for further analysis.  The Hickory-1 well has
been suspended ahead of the planned flow test in the 2023/24 Alaskan winter
operational season.

 

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

 Cenkos Securities Plc                            Tel: +44 (0)20 7397 8900
 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).

 

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.    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 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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