REG - 88 Energy Limited - Wireline Logging Results at Merlin-2

88 EnergyAnnouncement

29/03/2022 11:30

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RNS Number : 4084G  88 Energy Limited  29 March 2022

 

This announcement contains inside information

29 March 2022

 

88 Energy Limited

Wireline Logging Results and Forward Program at Merlin-2

 

Highlights

·   Wireline logging program nearing completion at the Merlin-2 well.

·   Provisional analysis of the wireline logging program indicates
reservoir quality at this location is insufficient to warrant a production
test.

·   MDT tool was unable to obtain fluid samples from target zones, despite
encouraging oil shows and Logging While Drilling (LWD) data.

·   Results consistent with Merlin-1 with fluorescence and petroliferous
odour in cuttings, elevated mud gas readings and evidence of mobile
hydrocarbons during MDT sampling.

·   Forward operations for the Merlin-2 well will now focus on plugging the
well and demobilisation.

 

88 Energy Limited (ASX:88E, AIM:88E, OTC:EEENF) (88 Energy or the Company)
advises that the Merlin-2 wireline logging program is nearing completion with
the final run in progress. The wireline program was designed to evaluate and
quantify the reservoir potential associated with the oil shows and elevated
mud gas readings noted across the target zones in the LWD data.

The primary objective of the Merlin-2 well was to collect hydrocarbon samples
from the target zones. Unfortunately, this was unable to be achieved using
Schlumberger's MDT (Modular-Formation Dynamics Testing) tool due to the
tightness of the formation at this location.

Whilst observations of LWD logs and drill cuttings collected throughout the
Merlin-2 drilling operations revealed target intervals are thicker than those
encountered in Merlin-1, and preliminary analysis of the LWD data indicated
sufficient permeability / porosity to obtain a hydrocarbon sample, results
from the wireline program have demonstrated target zones to have lower than
anticipated porosity / permeability resulting in difficulty obtaining fluid
samples of any significance.

The results of Merlin-2 are largely consistent with the initial Merlin-1
exploration well drilled in Project Peregrine in 2021, with strong
fluorescence, oil sheen, petroliferous odour and cut noted in the drilling
cuttings, elevated C2-C5 mud gas readings over the target zones with total gas
significantly above background gas readings and also evidence from the
reservoir sampling tool of movable hydrocarbons.

The pre-drill expectation from depositional modelling and nearby analogues was
that superior thickness and reservoir quality would be encountered to the east
of Merlin-1. Whilst thicker target intervals were noted at Merlin-2, the
porosity / permeability appear to be largely consistent with those observed at
Merlin-1.  Both Merlin wells were drilled on sparse, vintage 2D seismic data,
which provides a narrow field of view of the reservoir and limited optionality
on drilling locations.  88 Energy will now assess the merits of a future 3D
seismic acquisition program to better identify with modern processing of data
future drilling locations to optimally test and determine the potential
commerciality of the Peregrine acreage.

Forward operations for the Merlin-2 well will now focus on plugging and
abandoning the well and commencing demobilisation from the drilling location.
88 Energy will undertake a detailed evaluation of all the data obtained from
the Merlin-2 drilling program and evaluate the potential future appraisal
activities within the Project Peregrine acreage, which includes additional
independent drilling locations such as the Harrier-1 prospect to test the N-14
and N-15.

88 Energy expects to provide further post well testing and analysis updates,
as well as the future work program for Project Peregrine, when this
information is available.

Managing Director, Ashley Gilbert, commented:

"Whilst the initial results from the Merlin-2 well were encouraging, results
from the wireline program have demonstrated target zones to have lower than
anticipated porosity and permeability resulting in difficulty obtaining fluid
samples."

"The initial assessment of results of the Merlin-2 well are largely consistent
with the Merlin-1 exploration well drilled in Project Peregrine in 2021, with
fluorescence and cut noted in the drilling cuttings, elevated mud gas readings
over the target zones with total gas above background gas readings and also
evidence from the reservoir sampling tool of movable hydrocarbons."

"We appreciate that this result will be disappointing news for shareholders,
in particular that we were again unable to obtain a fluid sample at surface or
perform a flow test. However, we will now take the necessary time to fully
analyse the data from the Merlin-2 well. This will provide a basis upon which
the company can provide further updates on the future potential appraisal
program for the Project Peregrine acreage."

"88 Energy remains in a strong financial position, post the Merlin-2 well,
with zero debt and a healthy cash balance that will be further strengthened
with projected cash flows from the recently acquired portfolio of Texas
production assets, Project Longhorn."

"We are well placed to continue reviewing and progressing opportunities within
the Alaskan portfolio and particularly encouraged by the results to the north
of Project Icewine and look forward to providing updates in relation to this
project over the coming months."

 

 

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                                Tel: +61 8 9268 2829

 Dale Bryan

 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.

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