88 Energy (88E ) has confirmed to investors that it has mobilised the Rig-111 to the Merlin-1 drilling location on the North Slope of Alaska. The drilling, which is targeting 645m barrels of gross mean prospective resource, is expected to commence in the first week of March 2021.

The anticipated drilling of Merlin-1 forms part of the Alaskan-based explorer’s Project Peregrine which holds nearly 200,000 contiguous acres on the North Slope of Alaska.

The Company holds a 100% working interest in the Peregrine project that will reduce to a 50% interest post the completion of funding as part of a recent farm-in, whereby 88E is carried on the first US$10m (of an estimated US$12.6m total cost) for the Merlin-1 well.

Pictured below: Rig 111 prior to tear down for mobilisation
 (Source: 88 Energy)

Merlin-1 drilling is expected to take around three to four weeks, including logging. The group said that depending on the results from the logging, the well will then be flow tested.

Managing Director of 88E Dave Wall, commented, "Commencement of drilling at Merlin-1 is now just around the corner, targeting the extension of the highly successful Nanushuk play.

Success would underpin a company making development project for our shareholders, with the proven resource at the recently acquired at Umiat Oil Field adding substantial value."

A second well, Harrier-1, which will target gross mean prospective resource of 417 million barrels and will cost c. US$7m, is intended to commence immediately following completion of operations at Merlin-1, subject to results from Merlin-1, schedule and permit approvals. 

88E also highlighted the recent drilling of the Talitha-A well (Fig.1) by Pantheon Resources, a site situated close to the northern border 88E’s central acreage position at Project Icewine. 

Fig. 1 Talitha-A Location in relation to Icewine leases
 
(Source: 88 Energy)

The well is scheduled to be flow tested over multiple horizons after encouraging log results. Several of the prospective horizons in Talitha-A are interpreted to extend into 88E acreage.

In a statement released this week, Jay Cheatham, Pantheon’s CEO stated, "We've often said that any one of the four zones at Talitha could be Company makers, and we have three contenders in the SMD, Basin Floor Fan and Kuparuk, all of which show great promise. 

As always, we must wait until testing is completed before we can make any definitive assessments, but at this time I would say Talitha #A has met or exceeded our expectations thus far."

Pantheon said the discovery of significant quantities of oil at Talitha-A would have ‘very important ramifications’ for future exploration in the area and highlighted that its broader acreage position would “significantly enhance the economic value of any discovered oil."

Shares in 88 Energy have risen by nearly 5% in value since the start of 2021. The stock was trading 3.23% higher this morning at 0.48p as a result of 88E’s announcement. 88E now awaits the spud of Merlin-1 while it keeps its eye on the further development of the Talitha-A well where several prospective horizons are interpreted to extend into 88E’s acreage.

Reasons to Follow 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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