88 Energy (LON:88E) told investors it is expanding its footprint on Alaska’s North Slope, with some 174,240 acres being added to the portfolio.

The company and its joint venture partner Burgundy Xploration have been confirmed as the high bidder for the acreage, which is contiguous with the existing project Icewine licences.

To secure the extra land, which will take the total Project Icewine position to 272,242 acres, the partners are paying a total of US$947,000 as a down payment (representing 20% of the full cost).

Dave Wall, 88 Energy managing director, highlighted the importance of the deal and its timing, as the company continues work of its first well in the area.

“After shareholders have contributed A$20m to Project Icewine, it is strategically imperative to secure the dominant position in the play ahead of the results of the Icewine#1 well,” he said in a statement.

“We do not want to prove up a play and then have someone else acquire a large portion of it.”

The Icewine exploration well is currently poised just above its primary target, the HRZ shale play, although progress has been temporarily waylaid (for just a few days) for mechanical repair of the rig.

And 88 Energy believes with its expanded acreage position it may possibly have some 2bn barrels of potentially recoverable resources in the HRZ play, though it has yet to be confirmed by well results.

“Whilst we do not have definitive data that the HRZ play will be successful, the option value associated with the success case versus the relatively small downpayment required is an opportunity that cannot be passed up,” Wall added.

“Additionally, downside risk has been mitigated as we now have a greater chance that the HRZ or one of the conventional plays will work somewhere on the expanded acreage position.”

The Icewine acreage is also believed to host conventional oil resources too, and with the expanded footprint 88 Energy reckons its possible resources will double and could also be excess of 2bn barrels.

Drilling in the Icewine well reached partially into the Brookian conventional play prior to the hiatus and thus far gas and oil shows have been observed, albeit it very much remains the well’s secondary target.

The Icewine project has been something of a key attraction in the small cap exploration sector, where big impact wells are few are far between compared to previous years. It is expected to be a pre-cursor to a value-adding farm-out deal, should the well achieve the partners’ ambitious targets.

Wall said: “Any success at Icewine#1 will result in substantial industry interest, which we hope will lead to a highly accretive farmout in 2016.”

88 Energy told investors it was currently planning a small capital raising, which will include a component to allow existing shareholders to buy shares.  It is currently finalising those plans.

For more information, please visit: 88energy.com