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88E’s resource more than doubles at Icewine
2 minute read
DeGolyer & MacNaughton thinks 88 Energy (ASX:88E) may have up to 1.4 billion barrels of recoverable oil equivalent on its hands at Icewine, but internal figures have that number at up to 3.6 billion barrels.
The ASX-listed oiler released the first set of numbers on the Icewine project since it finished drilling, with the bulk of technical analysis on Icewine-1, showing 88E tripled its acreage position in the area.
According to independent assessor DeGolyer & MacNaughton, the Icewine project could have between 255.7 million barrels of total liquids and the play and 1.9 billion barrels of total liquids.
Before drilling at Icewine-1 began, D&G had put the recoverable potential of the play at 492 million barrels on a gross mean unrisked basis.
Some of the liquids at the project are wet gas, with 88E converting this into oil equivalent to come up with the 1.4 billion barrel oil equivalent figure.
The mean prospective recoverable liquids was put at 985.3 million barrels.
The consultancy also put the geological chance of success at 60%, up from its previous 40-41%, on the back of 88E’s extensive technical work at Icewine-1.
The company, however, thinks the consultancy may have underestimated the potential at the project.
It’s also put out a set of internal numbers for the project which beefs up the amount of land which may be production.
While D&G assessed all of the Icewine area in its calculations, it put the estimated productive areas at 42%, 88E has put out a more bullish 70% figure.
This leads to an internal resource estimate of 3.6 billion barrels of oil equivalent, with a mean of 2.6 billion barrels of liquids.
88 Energy told its shareholders that the discrepancy was down to the various calculation methods both parties had used.
While D&G used a comparatively generic set of guidelines around statistical analysis of other shale plays at a similar stage around the world, 88E’s model was driven by on the ground experience at Icewine.
The main difference between the pair was the amount of Icewine land which was deemed to be productive, with 88E saying that its more bullish estimate was driven by “years of hands on experience with developing the Eagle Ford Shale” and its internal thermal maturity model – which was confirmed by the drilling of Icewine-1.
Despite the discrepancy, 88E managing director Dave Wall said in any case the upgrade was a good sign.
“The large upgrade to the resource potential at Project Icewine highlights the unique leverage that a project with this possible magnitude provides to investors,” he said.