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88 Energy adds oil pay zone to Alaskan condensate discovery well

ASX-listed oil explorer, 88 Energy, has interpreted oil in a formation above the primary target zone’s confirmed condensate gas find at its “Charlie-1” oil appraisal well on Alaska’s oil-rich North Slope.  Detailed and independent analysis of the wireline logs obtained when the well finished drilling have identified an extra 19.5m of additional oil pay in the Seabee Formation where live oil shows were recorded while drilling.  Prior to drilling commencing, this zone was called the lower Lima target.

The company originally tagged the Charlie-1 test well as a step-out appraisal well to the old BP-operated oil exploration well, “Malguk-1”, drilled some distance to the south of Charlie-1.  Malguk-1 encountered oil shows in multiple horizons within the Torok Formation that sits below Seabee, back in 1991.  However, instead of initially striking the same oil pay zone, Charlie-1 found a healthy 50m of condensate-rich gas pay over a 200m interval in Torok.

The company said that the Charlie-1 appraisal well has proved the presence of mobile hydrocarbons, in the form of condensate gas, in the upper,  middle and lower Stellar targets of the Torok Formation.  Samples of condensate and gas were recovered from the middle and lower zones however the third zone in the Torok, the upper Stellar, was not tested due to the sub optimal location that it was intersected by the well.

88 Energy’s technical team assessed that the Torok could hold a potential volume of up to 192 million barrels of prospective oil resources net to the company, or approximately 40 per cent of the total gross prospective resources tested by Charlie-1.

Whilst the hydrocarbon phase encountered in the reservoir sand is interpreted as condensate, it is a liquid, or a very light oil, so the economic potential of the 50m of net pay could be significant in this onshore setting, given its assessed pre-drill volumes.  No doubt company Geo’s will be working overtime to determine the potentially recoverable oil and condensate volumes and where best to place the next test well.

The David Wall-led oiler said that further analysis will now be undertaken over coming weeks to confirm the composition and gas to liquid ratio of the samples obtained using a state-of-the- art downhole sampling tool called “Ora”.  Elsewhere in the well, the deepest target tested by Charlie-1 was the Kuparuk Formation where the detailed analysis has confirmed another 13m of potential condensate-rich gas pay.

88 Energy has plugged Charlie-1 in line with standard industry procedures and all equipment has been de-mobilised from site.  Management said that testing at this time is not optimal due to the lack of sufficient time remaining in the winter drilling season and the cost risk of the rig not being able to cross the Kuparuk River before the spring thaw.  The ongoing issues around personnel movements due to the COVID-19 pandemic have also made life difficult when it come to undertaking new operations at the site, according to the company.

88 Energy said Charlie-1 was still within budget and it did not expect to incur any costs in relation to the drilling of Charlie-1, given that farm-in partner, UK-based independent oil and gas producer, Premier Oil picked up the tab.

The company also said this week it had implemented a number of cost cutting initiatives to get the through the current Coronavirus period with the resultant savings coming in at more than A$750k.  The measures include cuts to board and management salaries.

88 Energy Managing Director, Dave Wall said: "Despite the surprise in relation to the phase of hydrocarbons discovered in the Torok Formation at this location, the Charlie-1 well has yielded encouraging results, particularly in the Seabee. The Seabee targets are extensive and have had excellent oil shows, including live oil observed at the surface in both Charlie-1 and Malguk-1. The significance of these observations in Charlie-1 will be confirmed by lab results in the near term.”

“The Torok, Seabee and HRZ all remain prospective targets at Project Icewine, albeit not without risk, and the Company continues to progress the aggregation strategy around its Yukon Gold-1 oil discovery.”

“We are also aware of activity in areas nearby to our projects from other Operators, which we believe has the potential to favourably impact the value of our large acreage position.

 

Is your ASX listed company doing something interesting ? Contact : matt.birney@businessnews.com.au

88 Energy (88E)

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