Shares of 88 Energy Ltd (AIM:88E, ASX:88E, OTC:EEENF) soared, reaching a nearly 30% increase in early Tuesday trading. This surge came in response to the company’s announcement of initial successful oil flows from well testing at Project Phoenix, located on Alaska’s North Slope.
The current testing at the Hickory-1 well has confirmed a new discovery of light oil in the Upper SFS (USFS) reservoir, which had not been tested before. The tests indicated oil flow rates of about 70 barrels per day (bopd) from a vertical section of the well. 88 Energy believes that rates from horizontal drilling could significantly exceed these figures.
The oil extracted is characterized by a gravity of around 40-degree API, and it also includes natural gas liquids (NGLs) and associated gas. This result was achieved following a low-volume frac operation over a 20ft vertical interval.
The company is now shifting its testing efforts to the SMD-B reservoir in the coming days as part of its multi-reservoir, staged flow test program. Additionally, 88 Energy plans to hire an independent consultant to evaluate the resource potential in the USFS zone.
Figure 1: Two sample bottles of 41.4-degree API oil sampled from the oil leg in the separator. (middle)104-degree Fahrenheit fluid sample from Hickory-1 USFS flow test, which is temperature corrected to 41.4-degree API at 60F (right) Sample of NGLs taken from the gas flare line.
Managing Director Ashley Gilbert highlighted the test as a major milestone for 88 Energy and its shareholders, noting the importance of achieving the first oil flow at the company’s Alaska projects. He emphasized the significant production rates achieved from a small, 20ft perforated section in a vertical well and expects much higher rates from long horizontal production wells.
Gilbert also pointed out the novelty of intersecting and testing the Upper SFS zone at Project Phoenix or in the surrounding area, celebrating the ability to produce oil and prove the reservoir’s producibility.
Following the analysis of the Hickory-1 testing program, the company will announce its future commercial strategies for the USFS and the wider Project Phoenix.
In London, 88 Energy’s shares experienced a notable rise, trading at 0.34p each, an increase of around 28.21% in early transactions.
