88 Energy Shares Jump After Respol JV Finds Oil Nearby in Alaska

By Alex MacDonald

LONDON--Shares in 88 Energy Ltd. (88E.AU) jumped Thursday after the oil explorer said the exploration success at the nearby Repsol-Armstrong joint venture could extend to its own Icewine project in Alaska.

The joint venture said Tuesday it has drilled 16 wells to date in Alaska, all of which have found hydrocarbons, and two of which are able to flow oil at a rate of between 2,000 barrels and 5,000 barrels of oil per day. Repsol S.A. is the project operator with a 70% stake in the joint venture while Armstrong Oil and Gas owns a 22.5% stake and GMT Exploration Co. owns a 7.5% stake.

So far, seven of the appraisal wells have proven an oil pool that covers more than 25,000 acres, at a depth of 4,100 feet, with an oil column of more than 650 feet, and up to 150 feet of net oil pay with an average porosity of 22%.

"The results reported by Repsol and Armstrong are outstanding and well above expectation," said 88 Energy's Managing director Dave Wall in a statement. "They clearly vindicate Repsol's $768 million deal with Armstrong in 2011 as well as highlight the success that can be achieved through utilization of modern 3D seismic on the North Slope."

88 Energy's London shares jumped nearly a quarter or 24% to 0.9 pence a share as of 0723 GMT, resulting in a market capitalization of GBP10.25 million or $16 million.

88 Energy is the operator and 87.5% owner of the Icewine project, an 98,182 acre exploration area located on the prolific North Slope of Alaska. Whilst 88 Energy is initially drilling for oil in the unconventional part of the project, the results from the Repsol-Armstrong joint venture indicate the scale of additional potential that may be unlocked if the company pursues a conventional oil project following the completion of a 3D seismic survey of the area.

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