88 Energy says all systems go at Charlie-1
88 Energy Limited (ASX:88E) has provided an update ahead of the upcoming drilling of the Charlie-1 appraisal well at Project Icewine, located on the Central North Slope, Alaska.
Management confirmed that all conditions precedent to the farm-out agreement between 88 Energy, Premier and Burgundy Xploration signed in August 2019 had been satisfied and that execution of the final agreements took place on November 26, 2019.
Dealings with regulatory authorities are also progressing well.
The Alaska Department of Natural Resources approved the Plan of Operations for the Charlie-1 appraisal well last week.
The Plan of Operations is one of the key major permits required for drilling.
The final major permit is scheduled for submission in December, with approval expected in January ahead of the scheduled February spud date.
All other contracting and logistical work is proceeding as planned ahead of the scheduled February 2020 spud date.
88 Energy expects new technology to yield success at Charlie-1
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.
From a geological perspective, Malguk-1 encountered oil shows with elevated resistivity and mud gas readings over multiple horizons during drilling, but it was not tested due to complications towards the end of operations, which resulted in a 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.
88 Energy subsequently undertook revised petrophysical analysis, which identified what is interpreted as bypassed pay in the Malguk-1 well.
Management also acquired modern 3D seismic in 2018 in order to determine the extent of the discovered oil accumulations.
Charlie-1 to intersect seven stacked prospects
As indicated below, Charlie-1 will intersect seven stacked prospects, four of which are interpreted as oil bearing in Malguk-1 and are therefore considered appraisal targets.
88 Energy will operate Charlie-1, via its 100% owned subsidiary Accumulate Energy Alaska, Inc, with the cost of the well to be funded by Premier Oil Plc up to US$23 million under a recent farm-out agreement.
Drilling is scheduled to commence in February 2020 with flow testing anticipated to conclude in April 2020.
The total Gross Mean Prospective Resource across the seven stacked targets to be intersected by Charlie-1 is 1.6 billion barrels of oil, representing 480 million barrels net to 88E.