TIDM88E
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 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.
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