TIDM88E
RNS Number : 2161Q
88 Energy Limited
26 October 2021
This announcement contains inside information
26 October 2021
88 Energy Limited
MERLIN-2 APPRAISAL WELL - RIG CONTRACT EXECUTED
Highlights
-- Rig contract executed for drilling of the Merlin-2 appraisal well at Project Peregrine
-- Permitting and planning remain on track for scheduled spud in February 2022
-- Merlin-2 is targeting 652 million barrels of oil(1,2) with geological chance of success of 56%
88 Energy Limited (ASX:88E, AIM:88E, OTC:EEENF) (88 Energy or
the Company) is pleased to announce that it has executed a rig
contract with Doyon Drilling Inc (Doyon) for the use of the Arctic
Fox rig to drill the Merlin-2 appraisal well at its Project
Peregrine in the NPR-A region of the North Slope of Alaska.
The Merlin-2 appraisal well is planned for drilling in February
2022 to a permitted Total Depth of 8,000 feet. Merlin-2 is
targeting 652 million barrels of oil (1,2) in the highly
prospective N18, N19 and N20 targets that were encountered in the
successful Merlin-1 well (drilled in March 2021 to a depth of 5,267
feet), which demonstrated the presence of oil in these multiple
stacked sequences in the Brookian Nanushuk Formation.
88 Energy has identified several appraisal drilling locations to
the east of the Merlin-1 well, closer to the shelf break where
enhanced reservoir thickness and quality are expected. The Merlin-2
well is independently assessed to have a geological chance of
success of 56%. The Company plans to announce the final drilling
location and further details of the Merlin-2 appraisal well in the
coming months.
88 Energy Managing Director, Ashley Gilbert, commented:
"We are delighted to be working with Doyon for the upcoming
drilling of the Merlin-2 appraisal well in early 2022. The Artic
Fox is one of the premier rigs on the North Slope and a rig which
88 Energy knows well, having utilised it in previous drilling
operations.
"Permitting and planning is already underway and we look forward
to providing additional details in relation to the Merlin-2
appraisal well in the coming months."
About Doyon
Doyon Drilling Inc. (DDI) operates on the North Slope of Alaska
with eight of the most unique oil and gas land drilling rigs
specially designed to drill oil wells in extreme conditions. DDI
was formed in 1982 as a joint venture between Doyon, Limited, an
Alaska Native regional corporation, and Nugget Alaska, Inc. In
1993, DDI became a wholly-owned subsidiary of Doyon Limited.
About the Arctic Fox
The Arctic Fox rig is a fully integrated, multi-module unit,
configured in highway transportable loads for early ice road
mobilization. This lightweight rig design is crucial to early drill
site access, allowing for maximum over-the-hole drilling, extending
the winter exploratory season by as much as 50%. The mast hoisting
capacity is 400,000 lbs. With an eight-line hookup, the
substructure is capable of a simultaneous load of 281,000 lbs (for
pipe set back) and 337,000 lbs (rotary table).
(1) Cautionary Statement: The estimated quantities of petroleum
that may be potentially recovered by the application of a future
development project relate to undiscovered accumulations. These
estimates have both an associated risk of discovery and a risk of
development. Further exploration, appraisal and evaluation are
required to determine the existence of a significant quantity of
potentially movable hydrocarbons.
(2) Mean unrisked resource - Net Entitlement to 88 Energy. Refer
announcement released to ASX on 16 August 2021
The below graphics can be viewed in the pdf version of this
announcement, which is available on the Company's website
www.88energy.com;
-- Potential appraisal drilling locations
-- The Arctic Fox rig
-- Project Peregrine and Recent Nanushuk Discoveries
Media and Investor Relations:
88 Energy Ltd
Ashley Gilbert, Managing Director
Tel: +61 8 9485 0990
Email:investor-relations@88energy.com
Finlay Thomson , Investor Relations Tel: +44 7976 248471
Fivemark Partners , Investor Tel: +61 410 276 744
and Media Relations Tel: +61 422 602 720
Andrew Edge / Michael Vaughan
EurozHartleys Ltd Tel: + 61 8 9268 2829
Dale Bryan
Cenkos Securities Tel: + 44 131 220 6939
Neil McDonald / Derrick Lee
Pursuant to the requirements of the ASX Listing Rules Chapter 5
and the AIM Rules for Companies, the technical information and
resource reporting contained in this announcement was prepared by,
or under the supervision of, Dr Stephen Staley, who is a
Non-Executive Director of the Company. Dr Staley has more than 35
years' experience in the petroleum industry, is a Fellow of the
Geological Society of London, and a qualified
Geologist/Geophysicist who has sufficient experience that is
relevant to the style and nature of the oil prospects under
consideration and to the activities discussed in this document. Dr
Staley has reviewed the information and supporting documentation
referred to in this announcement and considers the resource and
reserve estimates to be fairly represented and consents to its
release in the form and context in which it appears. His academic
qualifications and industry memberships appear on the Company's
website and both comply with the criteria for "Competence" under
clause 3.1 of the Valmin Code 2015. Terminology and standards
adopted by the Society of Petroleum Engineers "Petroleum Resources
Management System" have been applied in producing this
document.
About Project Peregrine
Project Peregrine is located in the NPR-A region of the North
Slope of Alaska and encompasses approximately 195,000 contiguous
acres. It is situated on trend to recent discoveries in a newly
successful play type in topset sands in the Nanushuk formation. 88
Energy has a 100% working interest in the project.
The Merlin-1 well was spudded in March 2021 with drilling
operations completed in April 2021. Interpretation of results was
completed in August 2021 with post well evaluation successfully
demonstrating the presence of oil in N20, N19 and N18 targets, with
41 feet of net log pay across the three reservoir intervals noted
and geochemical analysis determining the oil to have an estimated
API gravity between mid-30 to low-40 API (light oil).
A second well, the Merlin-2 appraisal well, is planned to be
drilled in Q1 2022 as a follow-up well to the Merlin-1 exploration
well. Merlin-2 is targeting a net entitlement mean Prospective
Resource of 652 million barrels (unrisked)(1,2) .
To view the Company's video and animated presentations of
Project Peregrine as well as the Merlin-1 well results and details
of the Merlin-2 well please click in the link to 88 Energy's
website www.88energy.com .
Independent oil and gas reservoir evaluation consultancy, ERCE
Australia Pty Ltd (ERCE), con ducted an updated assessment of the
Project Peregrine prospective resources post the Merlin-1 well
results. The updated prospective resource estimates and risking
assessments for Project Peregrine are noted below.
Revised Project Peregrine Prospective Resources
Project Peregrine: Alaska North Unrisked Net Entitlement to 88E (1,
Slope 4) Prospective Oil Resources (MMstb)
Prospects (Probabilistic Calculations) Low (1U) Best High Mean COS (3)
(2U) (3U)
---------
Merlin-2 (Nanushuk - N20, N19
and N18) 64 329 1,467 652 56%
========= ====== ====== ========= ========
Merlin-1A (Nanushuk - N14S) 25 87 282 132 17%
======================================== ========= ====== ====== ========= ========
Harrier (Nanushuk) 41 175 796 353 24%
======================================== ========= ====== ====== ========= ========
Harrier Deep (Torok) 35 226 1,132 486 20%
======================================== ========= ====== ====== ========= ========
Prospects Total 1,624(2)
---------------------------------------- --------- ------ ------ --------- --------
1. The Prospective Resources presented here are the result of a
risked probabilistic aggregation of the individual stacked
prospective layers in each prospect; the success case estimates
present the distribution of possible outcomes in the event that at
least one prospective layer is successful.
2. Unrisked mean total is not representative of the expected
total from the four prospects and assumes a success case in all
four wells.
3. COS represents the geological chance of success of at least
one of the stacked layers which comprise each prospect. This
excludes phase risk which ERCE has estimated to be 70% oil (30%
gas). The Prospective Resources have also not been adjusted for the
chance of development, which is estimated by 88 Energy to be 60%
(including phase risk), ERCE sees this as reasonable based on the
data available. Quantifying the chance of development (COD)
requires consideration of both economic contingencies and other
contingencies, such as legal, regulatory, market access, political,
social license, internal and external approvals and commitment to
project finance and development timing. As many of these factors
are out-with the knowledge of ERCE they must be used with
caution.
4. Gross Prospective Resources include off-block volumes over
which 88 Energy has no mineral rights. Net working interest
Prospective Resources are based on the on-block volumes and 88
Energy's 100% working interest. Net entitlement Prospective
Resources are the net working interest Prospective Resources less
royalties payable to others. The net entitlement interest to 88
Energy is calculated as 84.7% of net working interest after
deduction of state royalty (12.5%) and overriding royalty interests
(1.3%and 1.5%).
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END
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