88 Energy Limited (ASX: 88E) (“88 Energy” or the “Company”) is pleased to announce the following update for its projects located on the North Slope of Alaska.
Project Icewine – Icewine 3D
The Icewine 3D seismic survey, approximately 450 km2 in area and covering several large leads identified on 2D seismic, was completed on the 28th March – on schedule and within budget. Infield quality control, overseen by head office, has ensured that the data acquired is as clean as possible to enable fast track processing. Processing of shipments of data from the initial areas of the acquisition has commenced and early products, namely post stack migration, will be available in June 2018. This will allow confirmatory mapping of the stratigraphic / structural elements of the leads already identified in the conventional prospectivity portfolio.
Subsequently, velocity analysis and regularization will occur, providing the isotropic Kirchoff pre stack time migration product. This product will be used to further analyse and confirm the highly encouraging amplitude vs offset (AVO) anomalies identified on the 2D seismic. These AVO responses are often associated with the presence of hydrocarbons and, significantly, have already been identified at horizons where both oil shows and good quality reservoir is observed in regional well data.
As background, the 3D acquisition was designed to mature conventional prospectivity previously reported, including several leads with AVO support, in the western portion of the Project Icewine leases. 88 Energy is extremely encouraged by recent conventional and historic analog discoveries delineated on 3D seismic to the north of the Company's acreage within the Brookian sequence.
The Company's preparations for the launch of its planned farm-out, ahead of 2019 drilling operations, is well underway. The formal process is expected to commence mid-2018, based on the early products from the 3D seismic survey. The Company remains confident of achieving a successful outcome to the farm-out process prior to year end for the following reasons (based on the assumption that the 3D seismic is confirmatory of the prospectivity already identified on our 2D database):
• High quality database comprising both modern reconnaissance 2D and focused 3D seismic
Excellent oil shows, including live oil to surface, in nearby wells at horizons where good quality reservoir is also evident – coinciding with large mapped leads within the regionally proven Brookian play type
Multi-year permits are already secured for two well locations within the 3D acquisition area, allowing for near term (1H CY2019) drilling
Excellent operating capability, as evidenced by two recently drilled and operated wells, by the Company – both within budget and on schedule
Flexibility to cede operational control, to a suitably operationally experienced partner
Large discoveries in Brookian play type in nearby acreage to the north
Recent industry transactional activity on neighbouring acreage, valuing discovered resources at >US$3/bbl (Source: Oil Search investor presentation Dec 2017)
Project Icewine – Icewine#2 Flow Test
Planning is being finalised for the re-opening of the Icewine#2 well, which remains on schedule for April/May 2018. Exact timing is dependent on warmer temperature, with further details to be provided in the coming weeks.
In house evaluation is ongoing in relation to the recently acquired (subject to formal award) Yukon Gold leases, which contain an historic oil discovery. The Company is pleased to advise it awarded a seismic contract to SAExploration to acquire ~96km2 of 3D seismic, predominantly over the Yukon Gold leases. The seismic data will allow for assessment of the volumetric potential of the discovery as well as to identify any additional prospectivity over the broader lease position. Acquisition commenced on the 24th March and was completed on the 1st April.
The 3D survey was fast tracked to opportunistically benefit from an available seismic crew in the latter part of the 2018 acquisition season. Final processed products are anticipated in Q4 2018.
Yukon Gold Leases
Managing Director, Dave Wall, commented: “The 88E team have been extremely busy on multiple fronts over the last few months, with refinancing of debt, exercise of options, expanding our lease position, planning for, and acquisition of, two 3D seismic surveys and, of course, the re-opening of the Icewine#2 well.
The strong support for the recent option exercise has meant we have been able to accelerate assessment of the Yukon Gold leases, with the costs of the planned 3D acquisition being less than half of the monies receipted from the option exercise process.
The remainder of 2018 promises to be pivotal for the Company and its shareholders, with near-term activity related to the Icewine#2 flow test, expected prior to mid-year, results from two 3D seismic acquisitions and one or more farm-out transactions targeted for the second half of the year.”
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