TIDM88E
RNS Number : 2246B
88 Energy Limited
10 February 2022
10 February 2022
This announcement contains inside information
88 Energy Limited
Merlin-2 Permit to Drill Approved
Highlights
-- Permit to Drill for the Merlin-2 appraisal well approved
-- Commissioning of the Arctic Fox completed - mobilisation to commence
-- Spud of Merlin-2 scheduled for early March 2022
88 Energy Limited (ASX:88E, AIM:88E, OTC:EEENF) ( 88 Energy or
the Company ) is pleased to confirm that the Permit to Drill has
been approved by the Bureau of Land Management (BLM) for the
Merlin-2 appraisal well, located in Project Peregrine in the NPR-A
region of the North Slope of Alaska.
Commissioning of the Arctic Fox rig has been completed, with
mobilisation to the Merlin-2 drilling location commencing.
Pioneering of the single lane snow road to the Merlin-2 location
has also been completed.
The Merlin-2 well is now scheduled to spud in early March 2022
with drilling expected to take approximately 3 - 4 weeks, including
wireline logging.
Managing Director, Ashley Gilbert, commented:
"Following a period of review we are pleased to have the PTD in
hand, and the mobilisation of the Arctic Fox rig commencing to the
drilling location ahead of spud in early March 2022. We look
forward with excitement to the drilling of the highly anticipated
Merlin-2 appraisal well."
The Merlin-2 appraisal well is planned for a Total Depth of
8,000 feet, and is targeting 652 million barrels of oil (1,2) in
the highly prospective N18, N19 and N20 targets that were
encountered in the successful Merlin-1 well (drilled in March 2021
to a depth of 5,267 feet). Merlin-1 demonstrated the presence of
oil in these multiple stacked sequences within the Brookian
Nanushuk Formation.
F urther details on the upcoming operations at the highly
prospective Merlin-2 appraisal well, and the Company's other
activities, are contained in the Company's latest corporate
presentation, which is available on 88 Energy's website at
www.88energy.com .
(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 prospective resource - Net Entitlement to 88
Energy. Refer announcement released to ASX on 16 August 2021
The below graphics can be viewed in the pdf version of this
announcement, which is available on the Company's website
www.88energy.com:
-- Snow road construction for Merlin-2
-- Wireframe image showing respective Merlin-1 and Merlin-2 well
locations, facing east and overlain with predicted reservoir sands
profile.
-- Project Peregrine and Recent Nanushuk Discoveries.
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 Tel: +61 410 276 744
Media Relations Tel: +61 422 602 720
Andrew Edge / Michael Vaughan
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.
About Project Peregrine
Project Peregrine is located in the NPR-A region of the North
Slope of Alaska and encompasses approximately 195,000 contiguous
acres. It is situated on trend to recent discoveries in a newly
successful play type in topset sands in the Nanushuk formation. 88
Energy has a 100% working interest in the project.
The Merlin-1 well was spudded in March 2021 with drilling
operations completed in April 2021. Interpretation of results was
completed in August 2021 with post-well evaluation successfully
demonstrating the presence of oil in N20, N19 and N18 targets, with
41 feet of net log pay across the three reservoir intervals noted
and geochemical analysis determining the oil to have an estimated
API gravity between mid-30 to low-40 API (light oil).
A second well, the Merlin-2 appraisal well, is planned to be
drilled in Q1 2022 as a follow-up well to the Merlin-1 exploration
well. Merlin-2 is targeting a net entitlement mean Prospective
Resource of 652 million barrels (unrisked)(1,2) .
To view the Company's video and animated presentations of
Project Peregrine, as well as the Merlin-1 well results and details
of the Merlin-2 well, please click on the link to the 88 Energy
website www.88energy.com .
Independent oil and gas reservoir evaluation consultancy, ERCE
Australia Pty Ltd (ERCE), con ducted an updated assessment of the
Project Peregrine prospective resources post the Merlin-1 well
results. The updated prospective resource estimates and risking
assessments for Project Peregrine are noted below.
Revised Project Peregrine Prospective Resources
Project Peregrine: Alaska North Unrisked Net Entitlement to 88E (1,
Slope 4) Prospective Oil Resources (MMstb)
Prospects (Probabilistic Calculations) Low (1U) Best High Mean COS (3)
(2U) (3U)
---------
Merlin-2 (Nanushuk - N20, N19
and N18) 64 329 1,467 652 56%
========= ====== ====== ========= ========
Merlin-1A (Nanushuk - N14S) 25 87 282 132 17%
======================================== ========= ====== ====== ========= ========
Harrier (Nanushuk) 41 175 796 353 24%
======================================== ========= ====== ====== ========= ========
Harrier Deep (Torok) 35 226 1,132 486 20%
======================================== ========= ====== ====== ========= ========
Prospects Total 1,624(2)
---------------------------------------- --------- ------ ------ --------- --------
1. The Prospective Resources presented here are the result of a
risked probabilistic aggregation of the individual stacked
prospective layers in each prospect; the success case estimates
present the distribution of possible outcomes in the event that at
least one prospective layer is successful.
2. Unrisked mean total is not representative of the expected
total from the four prospects and assumes a success case in all
four wells.
3. COS represents the geological chance of success of at least
one of the stacked layers which comprise each prospect. This
excludes phase risk which ERCE has estimated to be 70% oil (30%
gas). The Prospective Resources have also not been adjusted for the
chance of development, which is estimated by 88 Energy to be 60%
(including phase risk), ERCE sees this as reasonable based on the
data available. Quantifying the chance of development (COD)
requires consideration of both economic contingencies 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 out-with the knowledge of ERCE they must be used with
caution.
4. Gross Prospective Resources include off-block volumes over
which 88 Energy has no mineral rights. Net working interest
Prospective Resources are based on the on-block volumes and 88
Energy's 100% working interest. Net entitlement Prospective
Resources are the net working interest Prospective Resources less
royalties payable to others. The net entitlement interest to 88
Energy is calculated as 84.7% of net working interest after
deduction of state royalty (12.5%) and overriding royalty interests
(1.3%and 1.5%).
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