88 Energy Limited (“88 Energy” or the “Company”, ASX:88E, AIM 88E) provides the following update related to its operations in the NPR-A region of the North Slope of Alaska.
· Merlin-1 production hole drilling to commence imminently
· At market share subscription agreement executed
88 Energy is pleased to report that the Merlin-1 surface hole was successfully drilled to 1,512ft as planned. Surface casing has now been cemented and the blow out preventer system tested. A formation integrity test (FIT) was successfully undertaken and the rig is now drilling ahead in the production hole where the primary Nanushuk targets are located. Planned total depth is 6,000′.
Logging while drilling and mudlogging will provide initial indications as to the prospectivity of the well during this part of the operation, which is expected take three to five days. A sophisticated wireline logging suite will then be run, including sidewall cores and downhole sampling. Wireline logging is expected to take five to seven days.
If the results from the wireline logging are encouraging, then the well will be completed with casing and a flow test conducted.
88 Energy has entered into a share subscription agreement (the “Subscription”) with ELKO International LLC (“ELKO”), one of the major contractors for the current drilling operations. Under the agreement ELKO has subscribed 360,000,000 new Ordinary Shares at $0.018 (the “Subscription Shares”), raising gross proceeds of $6.48 million at a 225% premium to the placement undertaken on 12th February 2021. There are no fees associated with the Subscription.
Application has been made for the Subscription Shares, which will rank pari passu with the existing ordinary shares in the Company, to be admitted to trading on both the ASX and AIM (“Admission”), with Admission expected to occur on 25 March 2021.
The Subscription does not require shareholder approval and the issue and allotment of the Subscription Shares will rely on the Company’s placement capacity pursuant to ASX Listing Rule 7.1A.
Following the issue of the Subscription Shares, the Company will have 12,521,590,431 ordinary shares in issue, all of which have voting rights. The figure of 12,521,590,431 ordinary shares may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or change their interest in, the Company.
Managing Director, Dave Wall, commented: “The endorsement of the project by ELKO as we enter the critical phase of the drilling is encouraging and will serve to fund the Company’s share of the recently announced cost overruns.
We wish all our shareholders good fortune over the coming days.”
About Project Peregrine – Imminent Drilling
Project Peregrine is located in the NPR-A region of the North Slope of Alaska and encompasses ~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 that will reduce to 50% post the completion of funding as part of a recent farm-in, whereby 88E is carried on the first US$10m (of an originally estimated US$12.6m total cost) for the Merlin-1 well.
The Merlin-1 well was spudded on 10th March 2021 and is targeting 645 million barrels of gross mean prospective resource#. Flow testing of Merlin-1 is planned, if wireline logging confirms a discovery. A second well, Harrier-1, may commence immediately following completion of operations at Merlin-1, subject to results from Merlin-1, schedule and permit approvals. Harrier-1 is targeting gross mean prospective resource of 417 million barrels#.
Independent Resource Assessment#
# Please refer to release dated 23 February 2021 for full details with respect to the Prospective Resource estimate, associated risking and applicable Cautionary Statement.
Each of the Merlin and Harrier prospects is located on trend to an existing discovery, in the same play type (Nanushuk topsets). This has de-risked the prospects considerably and resulted in a relatively high independently estimated geological chance of success.
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.
The below graphics can be found in the pdf version of this announcement available from the Company’s website;
– Graphic 1: Project Peregrine and Recent Nanushuk Discoveries
– Graphic 2: Merlin-1 – on trend to large Willow oil field
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