88 Energy says third party mapping of the area around AIM listed Pantheon Resources discovery of light sweet crude oil in Alaska shows the geological fairways likely extend to its Project Icewine ground on Alaska’s famed North Slope. The company says it is planning for a resource upgrade at Icewine within months and that talks with potential farm-in partners are in play.
Three geological plays have encouraged 88 Energy – notably the Shelf Margin Delta, or “SMD” play, the Seabee Lower Basin Floor Fan, or “BFF” play and the Slope Fan System, or “SFS” reservoir sections where Pantheon has enjoyed success through to the production testing stage and is now planning follow up horizontal production wells.
The company said third party mapping of the SMD play indicates the fairway where Pantheon drilled three discoveries extends onto its Project Icewine leases and mapping of the other two systems is almost complete.
The shallower, conventional horizons were not tested in previous drilling at Icewine as the company was at the time chasing an unconventional oil play.
88 Energy Managing Director, Ashely Gilbert said: “We’ve got a new exploration team at 88 and they’re going over everything. With the success of the conventional Talitha well, located less than three miles away to the north, it makes sense to revisit Icewine to see what we missed as we were previously chasing, deeper unconventionals.”
Pantheon drilled three nearby discoveries about 2.8 miles north of 88 Energy’s project boundary - Alkaid-1, Talitha-A and Theta West-1 – which flowed 35 to 40 degrees API oil from multiple reservoirs and confirmed reservoir deliverability. It is now planning development wells that are expected to produce at rates of over 1,000 barrels of oil per day, or “BOPD” per well via long horizontal wells with multi-stage hydraulic fracturing technology.
The data from all three wells contributed to the re-evaluation of the Project Icewine acreage.
Once the mapping of the remaining SFS and BFF zones is complete, 88 Energy said it expects the combined mapping of all three prospects to form the basis of an updated resource estimate for Project Icewine in the next quarter.
The company also said it is in farmout discussions relating to its 195,000-acre Icewine holdings. Due diligence and work program discussions are underway with potential partners although no binding commitments have been made.
The company recently widened its focus from a pure Alaskan exploration play to warmer climes when it bought 75 per cent and control of a Texan oiler producing around 300 barrels of Permian Basin oil per day.
It spent US$9.7 million to take Bighorn Energy’s 32 wells across nine leasehold areas and is targeting a doubling of production by year’s end.
The deal, backdated to January 1, provides cash flows and low-cost upside to offset the balance sheet implications of drilling high impact exploration wells on a sole-risked basis.
The Permian Basin is one of the United States’ premiere oil provinces and the geology of the Bighorn acreage is well understood with low technical risk and brings with it low-cost field development opportunities and potential acreage deals.
Combining fresh eyes with nearology can often bear fruit and if 88 Energy can leverage off its neighbour’s drilling success and publicly available material then it makes perfect sense to revisit its untested Project Icewine ground.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
