88E in the HRZ, more oil shows
88 Energy (ASX:88E) has hit more oil shows at Icewine-1, while ‘visible bleeding out gas’ was observed within the target HRZ Shale.
The oil and gas company told its shareholders that it had continued to hit oil shows on the way to the target HRZ shale, as it had previously done.
It previously said it had hit ‘residual oil shows’ from a zone above the target HRZ shale, but within a conventional horizon.
88E has now hit oil shows in a section of the well where the conventional horizon transitions into the HRZ.
It is still early days yet and it is not known how significant these oil shows are, but a 90-foot core from the conventional horizon has been sent off for testing.
The HRZ came in below prognosis, but 88E said this did not affect the thermal maturity model it had factored in pre-drill.
It said that it had hit visible bleed out gas from cuttings of the HRZ, saying this was “indicative of strong hydrocarbon saturation”.
However, more drilling and analysis will be needed before a definitive judgement can be made on the well.
88E shareholders seem to be buoyed by the early drilling though, with a previously announced share price placement closing oversubscribed.
Under trading rules, 88E was able to raise $4.43 million under the offer to go alongside a $7.43 million placement done in November.
However, the company received applications for $4.76 million worth of shares under the SPP.
Given 88E is dual listed and there were timing issues with the SPP, 88E has decided to scale back all applications by 6% rather than deciding who misses out based on the time the application was lodged.
The well is primarily testing the HRZ shale, but is also set to tap the shallower Brookian and deeper Kuparuk horizons.
It is being drilled as a vertical well to test all horizons at Icewine, with the drilling also set to be backed up by 3D seismic in the near term.
88E recently tripled its Icewine acreage on government auction in attempt to create the scale needed to attract a cashed-up joint venture partner in the case of success at Icewine-1.
The increased acreage position means that its target HRZ shale now has a recoverable estimate of a whopping 2 billion barrels of oil on 88E’s acreage.
It previously had a high case of 813.2 million barrels of oil.