88 Energy (AIM:88E) has kick-started drilling operations at its Charlie-1 appraisal well on the North Slope of Alaska, it confirmed in a statement this morning.
The AIM and ASX-listed energy firm had previously said that it expected spudding to occur around late February.
88’s programme, which is a step out appraisal of a 1991 BP exploration well named Malguk-1, is partnered with Premier Oil (AIM:PMO) to test a potentially significant discovery.
Charlie-1 will intersect seven stacked prospects, four of which are interpreted as oil bearing in Malguk‑1 and are therefore considered appraisal targets.
Together, the targets are estimated to hold 1.6 billion barrels of oil, or 480 million barrels net to 88E.
Shares in 88 Energy were trading 15% higher at 1.15p during Tuesday trading.
"The Charlie-1 well has been four years in the making for 88 Energy, beginning in 2016 when we first acquired 2D seismic over our Project Icewine acreage,” said Dave Wall, Managing Director of 88 Energy.
He added: “Since that time, the Company has reprocessed legacy 2D seismic (2017), undertaken a targeted acreage expansion and then shot modern 3D seismic (2018) before farming down (2019).
A prospect of this calibre in a frontier region requires significant time and effort to come to fruition and we are optimistic that success is just around the corner.”
88 raised A$5 million earlier in the year in January to help fund the appraisal well, in addition to the US$23 million in funding from Premier Oil under a farm-out agreement.
Following the group’s confirmation of drilling, flow testing is anticipated to conclude in April 2020.
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