88E to drill any day now
After some minor delays, 88 Energy’s (ASX: 88E) drilling program is set to begin.
Drilling of the production hole at the Charlie-1 appraisal well will commence imminently.
The Charlie-1 appraisal well is located on the Alaska North Slope at Project Icewine, where 88E and farm-in partner Premier Oil (LON: PMO) is targeting 1.6 billion barrels of gross mean prospective oil resource potential. Importantly, 480MMBO is net to 88E.
88 Energy will operate Charlie-1, via its 100% owned subsidiary Accumulate Energy Alaska, Inc. The cost of the well will be funded by Premier Oil Plc up to US$23 million under a recent farm-out agreement.
The Charlie-1 well has been designed as a step out appraisal of the Malguk-1 well drilled in 1991 by BP Exploration (Alaska) Inc.
Malguk-1 encountered oil shows with elevated resistivity and mud gas readings over multiple horizons during drilling by BP Exploration. Testing was abandoned due to complications towards the end of operations. Furthermore, Malguk-1 was 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.
88E also completed acquisition of modern 3D seismic in 2018, in order to determine the extent of the discovered oil accumulations.
Charlie-1 will intersect seven stacked prospects.
Four of these targets are interpreted as oil bearing in Malguk-1 and are therefore considered appraisal targets.
Drilling commenced on 2 March 2020, with flow testing anticipated to conclude in April 2020.
Drilling is a planned to a total depth of ~11,400 and the total program should be completed in around 60 days.
Early results are expected within weeks of the spud, with wireline results expected in April, followed by flow test results.
88E could book a maiden reserve as well as a large contingent resource within weeks of completing the drilling.
Charlie-1 could potentially be the biggest oil well of 2020, taking into consideration 88E’s $113 million market cap compared to the size of the target and the transformational potential of this drilling event.
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