88 Energy weeks away from drilling one of 2020’s biggest oil wells

By Meagan Evans. Published at Feb 12, 2020, in Energy

Dual listed junior oil explorer 88 Energy Limited (AIM:88E | ASX:88E) is now just weeks away from spudding its Charlie-1 appraisal well at Project Icewine on the North Slope of Alaska.

The drilling event at Charlie-1, which is on track for a late February spud, will see 88 Energy, along with its farm-in partner Premier Oil (LON:PMO), target 1.6 billion barrels of gross mean prospective oil resource, of which 480MMBO is net to 88E, across no less than seven stacked targets to be intersected.

All permits required for drilling are now in hand, with the Permit to Drill approved on 11 February.

The ice road to the Charlie-1 location is now more than 80% complete and is expected to be completed in the next two weeks, while ice pad construction is due to commence shortly. 88 Energy has executed a rig contract, via its 100% owned subsidiary Accumulate Energy Alaska Inc, with Nordic-Callista Services to utilise Rig#3 for the upcoming drilling.

Mobilisation of the Nordic Rig#3 to site is anticipated to begin in approximately 10 days.

Charlie-1 Ice Road Progress Map

Managing Director of 88 Energy, Dave Wall, said “Excellent progress has been made on the ice road construction, despite extremely cold temperatures. All permits are now in hand ahead of the scheduled spud in late February.

Charlie-1 will intersect seven stacked prospects identified by modern technology, four of which are interpreted as oil bearing in Malguk-1 and are therefore considered appraisal targets.

Each of these targets could be a potential standalone development in its own right and, when combined, the aggregate gross mean prospective resource potential is 1.6 billion barrels of oil, 480 million barrels of which is net to 88E given its retained 30% interest.

Project Icewine is in a new play called the Brookian Sequence, where over the last six years, massive amounts of oil — over 4.0 billion barrels — have been discovered. These new oil discoveries demonstrate the commercial viability of a previously speculative stratigraphic play type with vast unexplored potential.

Here are some of those discoveries along with 88E’s Project Icewine location:

Premier Oil farm-out

The cost of the Charlie-1 appraisal well will be funded by Premier Oil Plc (LON: PMO) up to US$23 million under a farm-out agreement that was executed in August 2019.

Premier Oil is a £850 million (A$1.6B) capped oil company with 80,000 barrels of oil equivalent per day in production. In exchange for funding the well, PMO will gain a 60% working interest in a circa 40% portion of Project Icewine’s conventional acreage in Area A, or the ‘Western Play Fairway’.

To further fund its operations, on 24 January, 88 Energy completed a share placement, raising A$5 million (£2.6M) at a price of A$0.021 (equivalent to £0.011).

88 Energy intends to use the capital raised to fund potential costs of the Charlie-1 well above the Premier Oil carry, as well as to fund lease rental payments, interest payments due on the debt facility, new ventures opportunities, and finance ongoing working capital and general and administrative overheads.

Here’s an overview of the opportunity present in 88E’s Charlie-1 well at Project Icewine:

S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.

Conflict of Interest Notice

S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.

Publishers Notice

The information contained in this article is current at the finalised date. The information contained in this article is based on sources reasonably considered to be reliable by S3 Consortium Pty Ltd, and available in the public domain. No “insider information” is ever sourced, disclosed or used by S3 Consortium.

Australian ASX Small Cap stocks | Why Finfeed.com is Australia’s leading small cap publication

Founded seven years ago, Finfeed.com is Australia’s leading and longest standing website for investor and finance news, education and expert opinion.

Published by StocksDigital, Finfeed was created to report daily on the comings and goings of ASX listed stocks in the small cap market.

As the first digital publication dedicated specifically to this space, Finfeed soon became the most trusted publication in the market, quickly garnering over two million page views – a number that continues to rise.

Finfeed.com provides its readers with informative articles that tackle the latest in market moving #ASX small cap news, plus exclusive content you won’t find anywhere else. It is aimed at those with an interest in investing, market education, company performance, start-ups and much more.

Finfeed.com is the only media organisation operating under the strength of a Financial Services License and is backed by leading journalists and analysts all with brands of their own.

The website aims to inform, educate and entertain with content that drills down into the heart of financial matters.

Finfeed is a leading source of investor and market information, with everything investors need to know about how to invest written in a way that anyone can understand. 

Over the years, the website has expanded beyond exclusively reporting on small caps, to profile Australia’s leading ASX listed small, mid and large caps as well as some of the country’s most successful CEOs and business leaders to find out what makes them tick.

Every day you will find fresh content covering:

Fast Facts

Over 4,000 articles published

Over 2.3 Million Page Views and counting

Over 10,000 followers on social media

Subscriber list growing by 2% monthly

Thanks for subscribing!

X