88 Energy Ltd Operational Update

 
TIDM88E 
 
2 December 2016 
 
                               88 Energy Limited 
 
                              Operational Update 
 
88 Energy Limited ("88 Energy", "the Company", "Operator") (ASX, AIM: 88E) is 
pleased to announce the following operational update in relation to Project 
Icewine, located on the North Slope of Alaska (77.5% Working Interest, 
Operator). 
 
Icewine#2 Progress 
 
Permitting 
 
Permitting remains on track for completion well ahead of the scheduled spud 
date for Icewine#2 in late Q1 2017. Two of the major permits, the Plan of 
Operations and Oil Discharge Prevention and Contingency Plan, have just passed 
major milestones in the permitting process with no problems identified. 
 
Vendor Selection 
 
With the design of the well, logging program and stimulation design now largely 
finalised, 88 Energy anticipates conclusion of key vendor contracts over the 
coming weeks, including rig selection. Availability of equipment for the 
planned design and schedule has been ascertained and no issues are expected on 
this front. 
 
2D Seismic Update 
 
Processing 
 
Final processing of the Icewine 2D vibroseis data acquired by 88 Energy during 
the first half of 2016 across the Project Icewine acreage was successfully 
completed in November. 
 
Conventional Prospectivity Review 
 
The range of preliminary leads identified in the Brookian and Beaufortian 
sequences, along with additional mapped leads have been matured and now form 
the basis of a diverse conventional Prospect and Lead inventory across the 
Project Icewine acreage. 
 
The majority of leads identified are stratigraphic: typically comprising slope 
apron, basin floor fan systems and turbidites. These leads are within proven 
play fairways with successful analogues on the North Slope. 
 
A number of leads are associated with enhanced seismic amplitudes which is 
considered promising as it can indicate the presence of hydrocarbons. To 
further evaluate the enhanced amplitudes, an amplitude versus offset (AVO) 
analysis was undertaken -  this work is ongoing and the initial results are 
encouraging. 
 
AVO response associated with Leads and Prospects is a useful tool as it can be 
used to rank and de-risk exploration targets. An image of AVO support with 
mapped lead is available on the pdf version of this announcement which is 
available from the Company's website. 
 
The forward plan is to fully mature the conventional Prospect and Lead 
portfolio and highgrade potential candidates for future exploration drilling. 
This will include finalisation of the volumetric estimation of the prospective 
resource potential, prior to year end. 
 
Managing Director of 88 Energy Limited, Dave Wall commented: "Operational 
activity associated with the near term spud of Icewine#2 is ramping up and the 
Company is on the cusp of testing the flow potential of the HRZ resource play. 
Our large acreage position and the quality of the rock means that the potential 
resource prize is enormous and success would be truly transformational. 
 
Additionally, the conventional portfolio continues to firm up, exceeding our 
expectations. 
 
We look forward to providing additional news on both fronts in the near 
future." 
 
Media and Investor Relations: 
 
88 Energy Ltd                                   Tel: [phone] 
Dave Wall, Managing Director                    Email: [e-mail] 
 
Finlay Thomson, Investor Relations              Tel: [phone] 
 
Hartleys Ltd                                    Tel: + 61 8 9268 2829 
Dale Bryan 
 
Cenkos Securities                               Tel: [phone] 
Neil McDonald/Derrick Lee 
 
This announcement contains inside information. 
 
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. In June 2016, the gross acreage 
position was expanded to 271,119 contiguous acres (210,250 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 a followup appraisal well, Icewine#2, scheduled for spud in 
1Q2017. Icewine#2 has been designed as a vertical well with a multi-stage 
stimulation and flow test, to assess the production potential of the HRZ. 
 
Significant conventional prospectivity has also been identified on recently 
acquired 2D seismic across the project acreage. 
 
Project Icewine Location map (please refer to the pdf of this announcement 
which is available on the Company's website.) 
 
Cautionary Statement: The estimated quantities of petroleum that may be 
potentially recovered by the application of a future development project relate 
to undiscovered accumulations. These estimates have both an associated risk of 
discovery and a risk of development. Further exploration, appraisal and 
evaluation are required to determine the existence of a significant quantity of 
potentially movable hydrocarbons. 
 
Generous exploration incentives are provided by the State of Alaska with up to 
35% of exploration expenditure refundable in cash. 
 
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 Ivishuk 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. 
 
About 88 Energy: 88 Energy has a 77.5% working interest and operatorship in 
271,000 acres onshore the prolific North Slope of Alaska ("Project Icewine"). 
The North Slope is the host to 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 three highly 
prospective play types that are likely to exist on the Project Icewine acreage 
- two conventional and one unconventional. The large unconventional 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 Trans Alaska Pipeline System. The 
Company has recently acquired 2D seismic to take advantage of the globally 
unique fiscal system in Alaska, which allowed for up to 75% of 1H2016 
exploration expenditure to be rebated in cash. Interim results from this 
seismic are encouraging, having identified several large leads. In late 2015, 
the Company completed its maiden well at the project, Icewine#1, to evaluate an 
unconventional source rock resource play which yielded excellent results from 
analysis of core obtained from the HRZ shale. A follow-up well with a 
multi-stage stimulation and test of the HRZ shale, Icewine#2, is planned for 
1Q2017. 
 
 
 
END 
 

(END) Dow Jones Newswires

December 02, 2016 02:00 ET (07:00 GMT)