88 Energy (88E ) said recently acquired data from drilling at the group’s Merlin-1 well in Northern Alaska has highlighted the potential of hydrocarbon-bearing zones at the site.
The Alaskan-focused explorer discovered the potential hydrocarbon-bearing zones while drilling at Merlin-1, which forms part of Project Peregrine, which holds nearly 200,000 contiguous acres on the North Slope of Alaska and where drilling started earlier this month.
Last week, the group told investors that Merlin-1 was successfully drilled to a depth of 1512ft. Today, 88E said drilling data from the Nanushuk Formation has encountered around 600 ft low to prognosis and is interpreted to be around 500 ft thicker than that encountered in the wells drilled into the Willow Oil Field to the north of the Project’s acreage.
88E said it is ‘encouraged’ by the gamma log which indicates the presence of more sand packages than those in the Analogue Wells which it said are generally cleaner in nature.
The group won’t know the reservoir quality until analysis of the wireline logging is complete.
Oil shows were recorded over multiple intervals in the Nanushuk while drilling Merlin-1. The company said fluorescence ranged from relatively weak to moderate "dry" fluorescence with slow to moderate sometimes fast streaming cut when exposed to solvent.
Mud gas peaks were also recorded and, although generally not of the same scale of the increase in total gas above background as that seen in the Analogue Wells, one prospective horizon showed ‘substantially’ elevated total gas, similar to that in the Analogue Wells.
Heavier gas components, including C5, were also observed over multiple intervals. 88E noted that resistivity was elevated over these intervals which it describes as “encouraging, particularly in the context that the Nanushuk is considered a low resistivity play type.”
Fluorescence was observed in the drilling mud accompanied by a petroliferous odour over three of the target intervals. Significantly, one of these intervals is interpreted to be part of a, potentially separate, sand package that is also present in the Harrier prospect, it said.
Commenting on the hydrocarbon potential, Managing Director, Dave Wall, said, "Whilst there is still work to do to confirm a discovery, the results to date are encouraging and we look forward to providing an additional update on the wireline program in 7 to 10 days."
Today’s results from recent drilling are considered ‘encouraging’ and 88E’s wireline program will now be run over the next week to determine the presence of mobile hydrocarbons.
Shares in 88 Energy have almost tripled in value since the beginning of 2021 and the recent news that it had commenced drilling at the Merlin-1 well marks “an exciting and pivotal time”. The stock was trading 14.29% higher this morning at 2p following the announcement.
Drilling at the Merlin-1 well follows the Crude Oil WTI Index reaching its highest level since October 2018 this month, with the commodity reaching highs of $67.98 per barrel.
Reason to 88E
Project Portfolio Across Alaska’s North Slope
The Alaskan explorer completed its acquisition of XCD Energy, which holds a 100% Working Interest in the highly prospective Alaskan North Slope, back in August 2020. The merged entity has formed a diversified portfolio of exploration projects on Alaska’s North Slope.
The combined company will have increased scale, market presence along with higher funding capability and trading liquidity across the ASX and London AIM exchanges.
The three key projects include Project Icewine, Yukon leases and Project Peregrine with the assets at various stages of development, the company previously outlined this summer.
In late 2020, 88E was also formally re-assigned the "Area A" leases at Project Icewine meaning its working interest in around 40% of the project has increased from 30% to 75%.
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