88 Energy “days away” from HRZ target
88 Energy (ASX:88E) is back on track at Icewine-1 and is “only days away” from hitting the target HRZ shale.
The oil and gas company told its investors today that after delays, drilling was back on track and would be back drilling after a statutory test of a blow out preventer.
It said the various delays on the well had not materially affected its budget on the well, with Icewine-1 still expected to come in under budget.
The well is currently sitting at 8773 feet (2674m), and has a planned total depth of 11,600ft.
The potential strategic upside of Icewine-1 recently tripled for 88E after it effectively tripled its acreage position at the project by picking up more land at government auction together with joint venture partner Burgundy Xploration.
This means the joint venture now has its foot (subject to final payments) on a contiguous acreage position of 272,242 acres in total.
88E has previously said that the increased acreage position effectively means the company has a recoverable estimate of 2 billion barrels of oil from the HRZ, previously 813.2 million barrels of the high side.
Drilling into the HRZ from other operators in the area has shown porosity at the HRZ to be 18.4%, which is estimated to be 50% better than that seen in the prolific Eagle Ford Shale in Texas.
Icewine-1 and possible follow-up Icewine-2 are being seen as vital to 88E’s chances of jagging a major oil company into a farm-in transaction.
“Whilst we do not have definitive data that the HRZ play will be successful, the option value associated with the success case versus the relatively small down payment required is an opportunity than cannot be passed up,” 88E managing director Dave Wall previously said.
“Any success at Icewine-1 will result in substantial industry interest, which we hope will lead to a highly accretive farmout in 2016.”