19 October 2015
Permit Progress Update
88 Energy Limited ("88 Energy" "the Company") (ASX, AIM: 88E) advises that the additional information requested by the Alaska Oil and Gas Conservation Commission was acquired over the weekend and is currently being processed. This information will be included in a revised Permit to Drill, expected to be submitted on Tuesday or Wednesday this week. Assuming that the data is deemed adequate, the Permit should be issued in a timely fashion and enable spud later in the week.
The Company will keep shareholders appraised of any changes to the plan described above.
Managing Director of 88 Energy Limited, Dave Wall commented: "Progress on the Permit to Drill has been encouraging and we we are now on track for spud later this week. The time has been utilised effectively, with minor repairs and additional testing undertaken on the rig, prior to handover ahead of spud."
Media and Investor Relations:
Australia |
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88 Energy Ltd admin@88energy.com +61 8 9485 0990 Hartleys Limited As Corporate Advisor Mr Dale Bryan +61 8 9268 2829 |
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United Kingdom Cenkos Securities Plc |
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As Nominated Adviser Mr Neil McDonald |
Mr Derrick Lee |
Tel: +44 (0)131 220 9771 / +44 (0)207 397 1953 |
Tel: +44 (0)131 220 9100 / +44 (0)207 397 8900 |
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Project Icewine Highlights
In November 2014, the Company entered into a binding agreement with Burgundy Xploration (BEX) to acquire a significant working interest (87.5%, reducing to 78% on spud of the first well on the project) in a large acreage position on a multiple objective, liquids rich exploration opportunity onshore Alaska, North America, referred to as Project Icewine.
88 Energy has a 98,182 gross contiguous acre position with 85,900 acres net to the Company (76,582 net acres post spud), located on an on all year operational access road with both conventional and unconventional oil potential. The primary term for the State leases is 10 years with no mandatory relinquishment and a low 16.5% royalty.
The unconventional oil play will be tested by the upcoming Icewine #1 exploration well, scheduled for commencement of drilling in October 2015.
Figure 1: Project Icewine Location
Generous exploration incentives are provided by the State of Alaska with up to 85% of exploration expenditure in 2015 cash refundable, dropping to 75% mid 2016 and thereafter 35%.
The primary objective is an untested, unconventional liquids-rich shale play in a prolific source rock, the HRZ shale,(Brookian Sequence), that co-sourced the largest oil field in North America; the giant Prudhoe Bay Oil Field Complex. Internal modelling and analysis indicates that Project Icewine is located in a high liquids vapour phase sweetspot analogous to those encountered in other Tier 1 shale plays e.g. the Eagle Ford, Texas.
Conventional play potential can be found at Project Icewine within the same Brookian petroleum system and shallow to the HRZ shale and includes high porosity channel and deep water turbiditic sands. The Brookian conventional play is proven on the North Slope; the USGS (2013) estimate the remaining oil potential to be 2.1 billion barrels just within the Brookian sequence. Additional conventional potential exists in the deeper Kuparuk sands and the Ivashuk Formation.
Drilling, (2012), in the adjacent acreage to the north confirmed that the HRZ shales, along with the underlying Kingak & Shublik shales, were all within the oil window which is extremely encouraging for the unconventional potential at Project Icewine. In addition a conventional oil discovery was reported in the Kuparuk sandstones.
A Prospective Resources Report by DeGolyer and MacNaughton, was commissioned by 88 Energy to evaluate the unconventional resource potential of Project Icewine in early December 2014 and was released to the market on 19 January 2015.
About 88 Energy: In late 2014, 88 Energy acquired an initial 87.5% working interest (reducing to 78% on spud of the first well on the project) and operatorship in 98,182 acres onshore the prolific North Slope of Alaska ("Project Icewine"). The North Slope is the host for the 15 billion barrel Prudhoe Bay oilfield complex, the largest conventional oil pool in North America. The Company, with its Joint Venture partner Burgundy Xploration, has identified two highly prospective play types that are likely to exist on the Project Icewine acreage - one conventional and one unconventional. The large resource potential of Project Icewine was independently verified by leading international petroleum resource consultant DeGolyer and MacNaughton. In addition to the interpreted high prospectivity, the project is strategically located on a year-round operational access road and only 35 miles south of Pump Station 1 where Prudhoe Bay feeds into the TransAlaska Pipeline System. The Company plans to progress drilling and seismic in the near term to take advantage of the globally unique fiscal system in Alaska, which allows for up to 85% of CY2015 exploration expenditure to be rebated in cash.
