TIDM88E
RNS Number : 3389T
88 Energy Limited
24 November 2021
24 November 2021
This announcement contains inside information
88 Energy Limited
Merlin-2 Appraisal Well Location Selected
Highlights
-- Merlin-2 location selected from the three locations initially
permitted for the appraisal program
-- Target drilling location situated east and downdip of Merlin-1
-- Merlin-2 well location expected to display thicker reservoir
sections and higher permeability / porosity sands, targeting 652
million barrels of oil1,2 with geological chance of success of
56%
-- Remaining two locations, together with Harrier-1, are
permitted and can be drilled at a later stage
-- Production test for the Merlin-2 well planned subject to results of wireline program
-- Permitting and planning of Merlin-2 is at an advanced stage,
with the benefit of learnings from Merlin-1
88 Energy Limited (ASX:88E, AIM:88E, OTC:EEENF) (88 Energy or
the Company) is pleased to announce that the Merlin-2 well location
has now been selected, from three initially permitted locations.
The Merlin-2 well location, scheduled for drilling in February 2022
using the recently contracted Arctic Fox rig, is located east and
downdip of the successful Merlin-1 well. This location is expected
to encounter thicker reservoir sections and higher permeability /
porosity sands.
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), which demonstrated the presence of oil
in these multiple stacked sequences in the Brookian Nanushuk
Formation.
The remaining two locations permitted, together with the
permitted Harrier-1 location, can be drilled in future years as
part of an extended drilling program to assess the full potential
of the Project Peregrine acreage.
A production testing program for the Merlin-2 well has been
designed and will be on standby during initial wellsite operations.
The production test is contingent upon the wireline program
results, in particular the MDT results, as well as government
approvals. The program and length of the test will be subject to
operational, funding and weather window considerations.
Permitting and planning for the Merlin-2 well remains on track
for scheduled spud in February 2022.
F urther details on the upcoming operations at Merlin-2, 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 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;
-- The Merlin-2 well location
-- Wireframe image showing respective Merlin-1 and Merlin-2 well locations
-- 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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