88 Energy provides lease update
Thursday, Dec 07, 2017
88 Energy Limited (“88 Energy”, “the Company”, “Operator”) (ASX, AIM: 88E) is pleased to provide an update on its projects, located onshore North Slope of Alaska.
Highlights
• Announced high bidder on two parcels of acreage totalling ~32,800 gross acres
Bid Details
88 Energy Ltd via its subsidiary companies, Accumulate Energy Alaska Inc and Regenerate Alaska Inc, was announced high bidder on 32,800 gross acres on 6th December (AK time) as part of the North Slope Areawide 2017W lease sale.
The two parcels are subject to regulatory approvals and formal award, expected in 2018. Joint Venture Partner, Burgundy Xploration LLC, has a right to back in to ~2,590 acres contained within Parcel 1, adjacent and to the west of the existing Project Icewine leases.
Additional detail will be provided on the new leases in due course.
Managing Director, Dave Wall, commented: “This result is a continuance of our acreage expansion plan on the North Slope and the Company is very pleased to be announced high bidder at the recent lease sale. Additional details in relation to both parcels will be announced in due course.”
Project Icewine Overview
In November 2014, the Company entered into a binding agreement with Burgundy Xploration (BEX) to acquire a significant working interest (87.5%, reducing to 77.5% 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. The current gross acreage position is 458,097 contiguous acres (286,589 acres net to the Company).
The Project is located on an 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 HRZ liquids-rich resource play has been successfully evaluated based on core obtained in the recently completed (December 2015) Icewine #1 exploration well, marking the completion of Phase I of Project Icewine. Phase II has now commenced, with drilling at the follow-up appraisal well, Icewine#2, commencing early 2Q2017. Production testing is ongoing.
Significant conventional prospectivity has also been identified on recently acquired 2D seismic across the project acreage.
Exploration incentives provided by the State of Alaska with up to 35% of net operating loss refundable in cash were concluded for all expenditure post 30 June 2017.
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.
Recently acquired 2D seismic has identified large conventional leads at Project Icewine within the same Brookian petroleum system and shallow to the HRZ shale, including potential high porosity channel and turbiditic sands associated with slope apron and deepwater fan plays. The Brookian conventional play is proven on the North Slope; the USGS (2013) estimated the remaining oil potential to be 2.1 billion barrels within the Brookian sequence. Two recent discoveries in the Brookian have already exceeded these estimates, with Armstrong/Repsol discovering 1.4 billion barrels in 2015 and Caelus announcing a 2.5 billion barrel discovery in 2016. Additional conventional potential exists in the Brookian delta topset play, deeper Kuparuk sands and the Ivishak Formation.
A Prospective Resources Report by DeGolyer and MacNaughton, was commissioned by 88 Energy to evaluate the unconventional resource potential of Project Icewine in February 2016 and was released to the market on 6th April 2016.
