88 Energy is poised to start flow-testing two reservoir zones in its Hickory-1 well in Alaska as it takes aim at upgrading its prospective resources to the higher-confidence contingent category.
The company says both zones showed strong hydrocarbon indicators during drilling and have a combined gross, unrisked best technical prospective resource estimate (P50 or 2U) of 358 million stock tank barrels of oil. It says the flow tests are critical to development planning for its Phoenix project and will provide important data to confirm reservoir deliverability, fluid compositions and reservoir pressures and connectivity.
Management says that data will provide the crucial first steps on the path to development for the greater Phoenix project that sits on the onshore oil prone section of Alaska’s north slope near the Trans Alaska oil pipeline. All American Oilfield’s “Rig-111” has been commissioned at the Hickory-1 well location and is currently testing the blow-out-preventor (BOP) stack – a critical piece of hardware installed on the wellhead at surface that prevents the uncontrolled flow of hydrocarbons to surface.
Following BOP testing, the company says plans to retrieve a temporary abandonment assembly known as the “kill-string” from the well before running a drilling assembly in the hole to drill through the plugs that were installed downhole to prevent reservoir fluids from entering it.
88 Energy says it will then circulate the wellbore with fresh mud, in a process known as “clean-up”, to remove any debris and prepare the hole for flow-testing operations. That will lead to the introduction of completion fluid to the well to enable the testing.
In all, the preparation for the flow tests is expected to take about five days.
The tests will target the Upper Slope Fan System (SFS) reservoir and the shallower shelf margin deltaic-B (SMD-B) reservoir, which together represent a solid prospective oil resource. Both intervals showed good hydrocarbon indicators during drilling and the upcoming flow test results may allow some of that resource to be upgraded to the contingent category.
88 Energy says it will initially test the Upper SFS reservoir and then the SMD-B reservoir, with each zone to be independently isolated, stimulated and flowed to surface using nitrogen lift to assist in an efficient clean-up of the well.
Data collected will assist the company in maturing its in-ground resource and will include downhole and surface fluid samples, downhole pressure and temperature data, surface pressure and temperature data and flow rates of oil, gas and water.
The company previously released its volumetric estimates for the reservoir intervals prior to the drilling of Hickory-1 quoting a gross, unrisked 2U/P50 resource estimate of 134 million stock tank barrels of oil (MMstb) for the slope fan system and 224 MMstb for the shelf margin delta reservoirs. The volumes equate to a 2U/P50 net resource to 88 Energy of 84MMstb and 140MMstb, respectively.
During drilling, the Upper SFS reservoir provided significantly elevated mud-gas readings at about 15 times more than background, visual porosity in cuttings and immediate hydrocarbon shows following the application of solvent to cuttings – suggesting good permeability.
Drilling observations in the shallower SMD-B zone were also suggestive of hydrocarbon presence. The company says drill cuttings at that level showed fluorescence under ultraviolet light, an indicator of hydrocarbon presence, and also showed elevated mud-gas readings.
The Hickory-1 well was drilled vertically to intersect as many flat-lying reservoir sandstone intervals as possible in a cost-effective manner.
Vertical wells in that type of reservoir architecture typically flow at lower rates than their horizontal counterparts, primarily due to the reduced meterage of the well exposed to the sandstones. 88 Energy says nearby analogue vertical wells have flowed in a range of between 50 and100 barrels of oil a day per test.
The Phoenix project has been owned by 88 Energy since 2015 and the drilling of Hickory-1 last year validated the presence of multiple hydrocarbon-bearing zones across all six pre-drill targets, in addition to identifying the Upper SFS reservoir as a bonus.
The company has a 75 per cent interest in the project, which raised eyebrows late last year when it certified an additional 250 million barrels of oil equivalent (MMboe) in the deepest reservoir interval hit by Hickory-1. Interestingly, that certification was due to successful flow tests conducted by another company at the same reservoir level nearby.
Now, with two shallower flow tests just days away, 88 Energy is taking aim at further swelling the Phoenix project books by repeating that feat.
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