88 Energy expects to be spudding its high-impact Charlie-1 oil appraisal well onshore in Alaska in late February as construction of the ice access road nears 80% completion. The company said the well will test up to seven stacked targets that could have a gross mean prospective oil resource as high as 1.6 billion barrels. Oil shows were observed historically at multiple levels in an old, un-tested offset well that augers well for the potentially success of the well.
The Charlie-1 well is located on the well-known “North Slope” in Alaska. Four of the seven horizons are already considered to be oil bearing and were observed in a nearby offset well called “Malguk-1” that was drilled to the South by BP in 1991. The Malguk-1 test well encountered oil shows in multiple horizons but those zones of interest were never tested as operational complications cut the winter drilling season short.
Access to the drill site is via an ice road that is now 80% complete according to the company, with construction of the ice drill pad due to commence shortly. Management said it expects the Nordic Rig#3 drilling unit to commence mobilisation to the site in about 10 days now that all permit approvals are in place. The anticipated spud date is before the end of February.
88 Energy Managing Director, Dave Wall said: "Excellent progress has been made on the ice road construction, despite extremely cold temperatures. All permits are now in hand ahead of the scheduled spud in late February.”
88 Energy will operate the well on behalf of all lease holders through its 100% owned subsidiary, Accumulate Energy Alaska Inc, and the well will be funded by farm in partner, Premier Oil who will spend up to US$23m under a recently executed agreement. Premier will earn a 60% working interest leaving 88 Energy with a 30% working interest in the Charlie-1 well.
Premier is a large independent, UK-based oil and gas exploration and production company with operations in seven countries that delivered 78,400 barrel of oil equivalent per day in FY19. The farm-in deal with Premier Oil has put some wind in 88 Energy’s sails and would appear to be an endorsement of the prospectivity of its Alaskan acreage.
Charlie-1 has the potential to be a company maker for ASX-listed 88 Energy and the farmout to Premier mitigates much of its financial risk as operator of the project.
A few good sniffs of oil will see 88 Energy take on an entirely different complexion.
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