88 Energy Shares Surge After Reducing Icewine Project Risk

By Alex MacDonald

LONDON--Shares in 88 Energy Ltd.(88E.AU) jumped Wednesday after the Alaska-focused oil explorer said it has further reduced the risk involved in developing the Icewine shale project in Alaska, U.S. and is in the final stages of talks with Bank of America Corp. (BAC) on project funding.

"Two of the three main 'Achilles Heels,' being thermal maturity and matrix permeability, have now been substantially de-risked, coming in at, or above, pre-drill expectations," said Dave Wall, the managing director of 88 Energy.

Thermal maturity meaures the degree to which a rock needs to be heated to extract hydrocarbons while the matrix permeability measures the ease with which hydrocarbons can then be extracted from a rock.

88 Energy said that the matrix permeability indicates the possiblity for 'super highways' at the core HRZ shale interval of the prospect. It added that results of such tests were significantly higher than the cut-off limits required to continue to successfully develop the project.

Shares in the U.K.-listed oil firm were up 33% to 0.45 pence a share in morning trading, resulting in a market capitalization of GBP14 million or $20 million.

"Additional work remains... however, at this stage of the evaluation we could not have hoped to be in a better position," said Mr. Wall.

The company is now in the final stages of a tender process for the seismic survey and said that it is in the process of securing funding in line with the project's development schedule.

The Icewine project is located on Alaska's North Slope, which is host to the 15 billion-barrel Prudhoe Bay oilfield complex, the largest conventional oil pool in North America, according to the company.

-Write to Alex MacDonald at [e-mail]

(END) Dow Jones Newswires

February 10, 2016 04:06 ET (09:06 GMT)

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