88 Energy on track to drill Alaskan North Slope appraisal well

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88 Energy Limited (88E) has provided an update on the upcoming drilling of the Charlie-1 appraisal well at Project Icewine, located on the proven Alaska North Slope basin.

Via its 100 per cent owned subsidiary, Accumulate Energy Alaska, Inc, 88E has executed a rig contract with Nordic-Callista Services to utilise Rig-3 for the upcoming drilling of the Charlie-1 appraisal well. 88E utilised Rig-3 for the drilling of the Winx-1 well in March 2019 and was extremely pleased with its safe and efficient performance throughout the course of operations.

The company has also made significant progress on the permitting front, with only two of the key permits now outstanding. These are the Plan of Operations and Permit to Drill, which are both in the process of being finalised and approved.

Tendering and finalisation of contracts for equipment and services required for Charlie-1 are also advancing as planned.

Drilling is scheduled to commence in February 2020 with flow testing anticipated to conclude in April 2020.

The Charlie-1 well will intersect seven stacked targets, four of which are interpreted as oil bearing in Malguk-1 and are therefore considered appraisal targets.

The total Gross Mean Prospective Resource across the seven stacked targets to be intersected by Charlie-1 is 1.6 billion barrels of oil, of which 480 million barrels net to 88E.

The Charlie-1 appraisal well has been designed as a step out appraisal of a well drilled in 1991 by BP Exploration (Alaska) Inc called Malguk-1.

Malguk-1 encountered oil shows with elevated resistivity and mud gas readings over multiple horizons during drilling, but was not tested due to complications towards the end of operations, which resulted in lack of time before the close of the winter drilling season.

It was also drilled using vintage 2D seismic, which was insufficient to adequately determine the extent of any of the prospective targets encountered.

88E subsequently undertook revised petrophysical analysis, which identified what is interpreted as bypassed pay in the Malguk-1 well. 88E also completed the acquisition of modern 3D seismic in 2018, in order to determine the extent of the discovered oil accumulations.

Farm-out with Premier Oil

88E will operate Charlie-1, via its 100 per cent owned subsidiary, Accumulate Energy Alaska, Inc, with the cost of the well to be funded by Premier Oil Plc (LON: PMO) up to US$23 million (A$34 million) under a recent farm-out agreement.

In August 2019, 88E executed the farm-out agreement with Premier Oil plc, whereby Premier will farm-in for a 60 per cent interest in Area A (also referred to as the Western Play Fairway) of the conventional Project Icewine acreage. 88E will retain a 30 per cent working interest in Area A with the remaining 10 per cent working interest held by Burgundy Xploration LLC.

Premier will pay the full costs of the appraisal well, Charlie-1, up to a total of US$23 million to test the reservoir deliverability of the Malguk-1 discovery.

The conditions precedent related to that farm-out with Premier Oil are being completed according to schedule, with all conditions expected to be met prior to the end of November 2019.

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