88 Energy to target 647m barrels of Alaskan oil with new well spud

88 Energy has spudded its Hickory-1 well at the company’s Phoenix project in Alaska, testing a sweet spot of seismic anomalies in a region that has enjoyed recent drilling success. The Hickory-1 well is permitted to a total depth of 12,500 feet or 3.81 km and designed to appraise up to six conventional oil reservoir targets with a net entitlement prospective resource of 647 mean million barrels of oil, as assessed by an independent consultant to the company.

The initial surface hole will be drilled to 3500 feet, or about 1km, followed by the installation of casing and a blow-out prevention system. Spudding is the process of beginning to drill an oil well when a larger drill bit is used to clear an initial surface hole. It is then lined with casing and a blow-out preventer installed prior to drilling to total depth. 88 Energy expects the spudding process to take two weeks.

Drilling to the total depth of up to 12,500 feet, or 3.81km, including logging while drilling and mud logging, is anticipated by the company to take a further two weeks.

Following drilling, 88 Energy will undertake wireline logging with the program designed to collect data essential to optimising future flow testing programs. Data will include multiple side wall cores and specialised tools to enable detailed oil reservoir characterisation. Flow testing of Hickory-1 is planned for the 2023-24 Alaskan winter season pending successful well indications. The schedule will enable the company to design an optimised flow test program, obtain permits and mobilise to site before the planned flow testing.

Project Phoenix is 75 per cent owned by 88 Energy and is located on the central north slope of Alaska covering 33,527 hectares. The Hickory-1 well is located on trend from recent discoveries by Pantheon Resources, according to the company. 88 Energy says independent mapping has demonstrated the oil plays across top, slope and bottom-set sands, extending from the Pantheon ground into the Phoenix tenements.

In the third quarter of 2022, independent consultant Lee Keeling and Associates concluded that Project Phoenix held an estimated unrisked conventional total of 647 mean million barrels of prospective oil resources net to 88 Energy.

88 Energy believes the Phoenix project has been significantly de-risked by a combination of the recent Pantheon drilling and flow tests on its adjacent ground to the north, data from the companies Icewine-1 well logs and a modern 3D seismic data set.

The Phoenix project is one of a growing handful of Alaskan oil and gas projects in the 88 Energy stable. The company purchased the Umiat oilfield in January 2021. Umiat is a shallow oilfield discovered in 1945 and has reserves independently estimated at 123.7 million barrels of oil. In November 2022, 88 Energy was declared the highest bidder for 10 leases covering 25,600 contiguous acres, or 10,360ha, immediately south of the major oil production centre at Prudhoe Bay.

The Phoenix project is close to existing infrastructure including the Trans-Alaska oil pipeline and the Dalton Highway. After previously drilling the Icewine-1 and 2 wells, testing for deep unconventional oil prospects, the company refocused on shallow, conventional reservoirs that are proven to be oil-bearing within adjoining acreage to the north and correlatable sequences containing oil shows in Icewine-1.

Three dimensional seismic studies, including Amplitude Versus Offset, or AVO analysis, and seismic inversion were used to optimise the drilling location of Hickory-1. Hickory-1 is located on an AVO anomaly in what the company describes as a “sweet spot of interpreted AVO anomalies.” The well will appraise six stacked reservoir targets.

88 Energy is about to drill a significant oil target adjacent to a known oil field in a highly-productive region of northern Alaska.

The company is also listed on the London Stock Exchange’s Alternative Investment Market and a US-regulated alternative trading system called OTC Markets. In addition to its Alaskan interests, the company has Texan oil production assets that produced 420 barrels of oil equivalent per day during the December 2022 quarter. 88 Energy has a 73 per cent interest in the Texan production, which has reserves of 2.1 million barrels of oil equivalent.

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