88 Energy (88E) , an Alaska-focused hydrocarbon explorer, said it has engaged independent resource certifier Netherland, Sewell & Associates Inc (NSAI), following Pantheon Resources' declaring a significant resource for the Lower BFF reservoir - the deepest of multiple hydrocarbon-bearing pay zones intersected during the drilling of 88 Energy's Hickory-1 exploration well at its flagship Project Phoenix on Alaska's North Slope.
88 Energy said NSAI would assess the BFF reservoir at Project Phoenix for a maiden contingent resource estimate based on Hickory-1's results and nearby offset well results, which may lead to Hickory-1 being confirmed as a discovery - a significant milestone for the company.
The maturation of a project from exploration to development to production requires its resource classification to be upgraded from Prospective to Contingent and finally to Reserves. 88 Energy said it intends to make this progression for "as many reservoirs as possible" with the first milestone expected to be achieved imminently for the BFF, followed by flow testing of multiple reservoirs at the Hickory-1 location.
If successful, the aggregate data will then be integrated into a Resource Assessment in 2024 with the intention of obtaining the Contingent Resource classification for all tested reservoirs.
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Another positive update from 88 Energy with two main takeaways - firstly, NSAI is expected to complete the maiden contingent resource estimate for the BFF reservoir at Hickory-1 imminently in November 2023. This may lead to Hickory-1 being confirmed as a discovery, a major value inflection point for 88E's flagship Project Phoenix on Alaska's North Slope. The Hickory-1 well is currently cased ahead of its upcoming flow test program, which is scheduled to commence in early Q1 2024. The well is targeting 647 million barrels of oil.
Certification of a contingent resource for the BFF reservoir will be a significant milestone for 88 Energy and Project Phoenix, allowing the focus of Hickory-1 testing to shift to the shallower reservoirs.
The second main takeaway from today's release is that 88 Energy intends to streamline the progression of multiple reservoirs at the Hickory-1 location to Contingent and then Reserves certification following BFF. To this end, the company plans to flow test these reservoirs with assistance from NSAI who have already commenced reviewing and integrating existing data from all reservoirs.
88 Energy is optimistic about Hickory-1 own flowtest as its northern neighbor on Alaska's North Slope, Pantheon Resources, recently announced a significant, third party estimated 2C contingent resource for the Lower BFF reservoir. The BFF is one of the deepest hydrocarbon-bearing pay zones intersected by Hickory-1. As mentioned, 88 Energy plans to flow test the reservoir, along with its primary, SMD, Upper SFS and SFS targets.
The company is also advancing its nearby Project Leonis with a view to prepare a maiden resource estimate in Q1 2024 ahead of targeted farm-out next year and potential drilling of a new well during the 2025/26 Alaskan winter operational season.
More broadly, 88 Energy has benefited from an increasing market focus on Alaska's North Slope resulting in recent exploration farmouts with new investors; as well as a continued positive development environment in Alaska and a 25% increase in the price of Brent oil since mid-2023. After a recent A$3.3m fundraise, 88 Energy remains well-funded for at least another 12 months and progressing at pace through its work programmes, expected to yield multiple milestones over the next year.
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