TIDM88E
RNS Number : 9209Z
88 Energy Limited
23 May 2019
23(rd) May 2019
88 Energy Limited
Alaska Projects Update
88 Energy Limited ("88 Energy" or the "Company", ASX:88E, AIM
88E) advises the following in relation to its oil and gas
operations on the North Slope of Alaska.
Highlights:
-- Project Icewine Conventional: farm-out process continues to progress with preferred bidder
o Third party due diligence process now largely complete
o Final decision on approval scheduled for June
-- Project Icewine Unconventional: advanced FIB-SEM* and HAWK**
analysis significantly advances understanding of HRZ shale play
o Majority of acreage remains within revised prospectivity
fairway
o Additional application of FIB-SEM underway to validate fairway
revision
o Franklin Bluffs (Icewine#2 location) considered to be
marginally outside revised fairway
o Formal farm-out process deferred to 2H 2019 - soft farm-out
underway with continued third party interest
-- Yukon Leases: discussions underway with nearby resource
owners to optimise monetisation strategy
-- Western Blocks: aggregation of additional data ongoing, with
tender for reprocessing work to occur 3Q 2019
*Focused ion beam scanning electron microscope, **hydrocarbon
analyser with kinetics
Project Icewine Conventional
Subsequent to the selection of a preferred bidder, indicative
terms have been agreed and due diligence is now largely complete.
The remaining steps are; final decision on approval and
documentation of the agreement. Both steps are scheduled to occur
in June 2019. The Company advises that there is no guarantee that
final approvals will be granted.
Project Icewine Unconventional
Finalisation of advanced analysis using state-of-the-art
technology has significantly advanced the Joint Venture
understanding of the nature of the HRZ play. This analysis has
confirmed that the HRZ is an excellent source rock with good
potential as an economic shale play.
The nature of the dominant kerogen in the HRZ has been
demonstrated to be prone to more rapid transformation into
hydrocarbons than other shales initially used for comparison. This
means that the thermal maturity window for volatile oil in the HRZ
is at lower temperature than that typically seen in other plays. As
a result, the Franklin Bluffs location (where both Icewine wells
were drilled) is considered to be just outside the fairway. The
kerogen in the HRZ at Franklin Bluffs has been converted largely to
solid bitumen, with sub optimal intraparticle porosity and
connectivity. The total porosity of the formation remains excellent
- the effective kerogen porosity (pathways between the particles
that contain the hydrocarbon); however, is lower than ideal. At
slightly lower thermal maturity, it is prognosed that
porosity/connectivity will be significantly improved.
The expansive leasing strategy employed by the Joint Venture
means that the majority of the revised fairway for the play remains
captured within the Project Icewine leasehold, with greater than
50% of the acres under lease considered prospective.
The forward program consists of accessing material from regional
wells in order to conduct additional FIB-SEM analysis to confirm
improved effective porosity and connectivity. Consequently, the
formal farm-out process will be deferred until 2H 2019 to allow for
this work to be completed. The Joint Venture continues to field
unsolicited third party interest in the HRZ shale play and an
informal farm-out process is underway.
Yukon Leases
Discussions have been initiated by the Company with nearby lease
owners to optimise the monetisation strategy for existing
discovered resources located in the vicinity of the Yukon Leases.
The Yukon Leases contain the 86 million barrel Cascade Prospect(#)
, which was intersected peripherally by Yukon Gold--1, drilled in
1994, and classified as an historic oil discovery. 88 Energy
recently acquired 3D seismic (2018) over Cascade and, on final
processing and interpretation, high-graded it from a lead to a
drillable prospect. The Yukon Leases are located adjacent to ANWR
and in close proximity to recently commissioned infrastructure.
(#) Refer announcement 7(th) November 2018
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.
Western Blocks
Good progress has been made on integration of the Winx-1 well
results into the existing 3D seismic volume. Additional data, that
will aid in the evaluation process for the Western Blocks, has been
identified. The forward program will be to access this data and
reprocess and reinterpret the 3D seismic. It is anticipated that
the evaluation work will be completed towards the end of
CY2019.
88 Energy Ltd.'s Managing Director, Dave Wall, commented: "Final
decision on approval for the conventional farm-out is now scheduled
for June 2019 and we remain optimistic of a favourable outcome for
our shareholders in the very near term.
It is also encouraging that recent analysis of the HRZ provides
both some answers as to why Icewine#2 did not flow as expected but
also that the play remains prospective on our leasehold."
Media and Investor Relations:
88 Energy Ltd
Dave Wall, Managing Director Tel: +61 8 9485 0990
Email: admin@88energy.com
Finlay Thomson, Investor Relations Tel: +44 797 624 8471
Hartleys Ltd
Dale Bryan Tel: + 61 8 9268 2829
Cenkos Securities
Neil McDonald/Derrick Lee Tel: +44 131 220 6939
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END
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