TIDM88E
RNS Number : 0692E
88 Energy Limited
08 March 2022
This announcement contains inside information
8 March 2022
88 Energy Limited
Merlin-2 Well Spudded
Highlights
-- Drilling of the Merlin-2 appraisal well has commenced.
-- Initial surface hole to be drilled to approx. 2,000 feet, cased and BOP system tested.
-- Drilling then set to deepen through the N18, N19 and N20
target horizons to the maximum planned Total Depth of approx. 8,000
feet.
88 Energy Limited (ASX:88E, AIM:88E, OTC:EEENF) ( 88 Energy or
the Company ) is pleased to report that the Arctic Fox rig
commenced drilling the Merlin-2 appraisal well, located in Project
Peregrine in the NPR-A region of the North Slope of Alaska, at
7:00pm on 7(th) March 2022 (Alaska time).
The Merlin-2 appraisal well is planned for a Total Depth ( TD )
of approximately 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).
The well is to be initially drilled to approximately 2,000 feet,
with the surface casing then installed and the Blow Out Preventer (
BOP ) system tested. This is anticipated to take approximately one
week in total. Drilling is then set to deepen the well through the
N18, N19 and N20 target horizons in the Nanushuk Formation to the
planned TD. This deeper drilling is anticipated to take up to
approximately four weeks.
Logging while drilling and mudlogging will provide initial
indications as to the prospectivity of the target horizons at the
Merlin-2 location. After reaching TD, it is planned to run a more
sophisticated wireline logging program, which includes collection
of down hole samples and side wall cores.
A production test program for the Merlin-2 well has been
designed and equipment placed on standby during initial well site
operations. Flow testing of Merlin-2 will be contingent upon the
wireline results, in particular the MDT outcomes, as well as
government approvals and weather window considerations.
(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 graphics below can be viewed in the pdf version of this
announcement, which is available on the Company's website
www.88energy.com:
-- Figure 1. Wireframe image showing respective Merlin-1 and
Merlin-2 well locations, facing east and overlain with predicted
reservoir sands profile.
-- Map of 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, spudded in early
March 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), conducted 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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