Press

88 Energy Limited Operations Update


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.

Highlights

  • Nitrogen lift commenced at Icewine#2

  • Yukon Gold and Western Margin leases formally awarded

Project Icewine – Icewine#2 Production Testing

As at 0530 17th June (AK time), wellhead pressure was 370psi with a flowback rate of 166 barrels of water per day on a variable choke setting, in order to manage wellhead pressure (currently 28/64”).

A production log was run on 12th June and confirmed that all perforations were contributing to flow. As per the flowback design, nitrogen was then introduced gradually to the wellbore from 0845 13th June (AK time), prior to installation of the coiled tube velocity string, to artificially lift stimulation fluids in order to gain connectivity to the reservoir. The flowback rate stabilised at 200 barrels of water per day through an 8/64” choke and then steadily declined to circa 100 barrels of water per day, as per expectation.

Flowback was interrupted, as per the program, on the 15th June 08:00 (AK time) to allow installation of the velocity string. Flow was re-established on 15th June at 20:00 (AK time) with nitrogen introduced into the annulus between the 4.5” casing and the 1.75” velocity string. After displacement of fluid in the annulus, the flowback rate stabilised at 350bpwd through a variable choke to maintain a target wellhead pressure of 200-400psi. This technique decreases the backside pressure in the system and optimises lifting of fluid from the wellbore.

Flowback is now being run through the separator and gas chromatograph and is considered to be 100% stimulation fluid and gas. The gross gas rate is averaging 571mcf/d. Approximately 24.8%, or 142mcf/d, of this is estimated to be hydrocarbons with the remainder being returned nitrogen, injected as part of the artificial lift. Hydrocarbon content is mostly methane (90%) with some heavier elements up to trace C6. The composition and rate is as expected for this stage of the flowback and results are considered unrepresentative of the hydrocarbon composition in the reservoir, as the well is still in clean-up phase. Salinity measurements of the flowback fluid indicate that connectivity to the reservoir remains limited, as expected, at this early stage.

Total clean up fluid returned (net of diesel for freeze protection and any other fluids introduced as part of the current operation) since commencement of flowback on 12th June is 820 barrels (interpreted as 100% stimulation fluid). Total fluid returned for the entire flowback operation, including last year, is now 6,353 barrels or 23% of the frac fluid injected vs a target percentage return of at least 30%.

The Icewine#2 well is located on the North Slope of Alaska (ADL 392301). 88 Energy Ltd (via its wholly owned subsidiary, Accumulate Energy Alaska, Inc) has a 77.55% working interest in the well. The well was stimulated in two stages over a gross 128-foot vertical interval in the HRZ shale formation, from 10,957-11,085ft TVD, using a slickwater treatment comprising 27,837 barrels of fluid and 1,034,838 pounds of proppant.

Prior to Winter shut-in (2017) 20% of the stimulation fluids had been flowed back versus a projected minimum target of 30% to gain connectivity to the source rock reservoir.

Flowback commenced, on schedule, at 22:30 11th June 2018 (AK time) to clean-up stimulation fluids from the Icewine#2 borehole with a well head pressure of 3,000 psi and flowback rate of 253 barrels of water per day on an 8/64” choke.

Lease Award Update

88 Energy, via its subsidiaries Accumulate Energy Alaska, Inc and Regenerate Alaska, Inc, has been formally awarded acreage it successfully bid on in the State of Alaska North Slope Licensing round December 2017. Lease documents have been executed and returned to the Alaska Department of Natural Resources and balance of funds have been wired.

Figure 1. Lease Award Map

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88 EnergyASXOperations UpdateProject IcewineYukon GoldAlaskaUnited States

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