Today, 88 Energy (88E) has published a report for the quarter to 30 September 2021 in which it highlights its progress over the period, including the recent success of its Merlin-1 program.
The drilling programme at Merlin-1 formed part of the explorer’s 100% owned Project Peregrine which holds nearly 200,000 contiguous acres on the North Slope of Alaska.
Earlier this year, the dual-listed Alaskan-focused explorer found success at the Merlin-1 well appraisal well on the North Slope of Alaska after geochemical analysis demonstrated definitive evidence of light oil, with an estimated API gravity between mid-30s to low-40s.
The Merlin-1 well was spudded in March 2021 and targeted 645 million barrels of gross mean prospective resource. With drilling now complete, and the interpretation of the results underway, a second well, Harrier-1, targeting 417m barrels is planned to be drilled in 2022.
Drilling at the Merlin-1 well follows the Crude Oil WTI Index reaching its highest level since October 2018 in June 2021, with the commodity reaching highs of $67.98 per barrel.
Following this success, the Merlin-2 appraisal well will now be designed to test the Nanushuk formation further to the east, where enhanced reservoir thickness and quality are expected.
In total, the Merlin-2 well will target a net entitlement mean Prospective Resource of 652 million barrels of oil (unrisked) and is scheduled to be drilled in Q1 CY2022, 88 explained.
At the start of August 2021, shares in 88E jumped after the firm confirmed to investors that it had been granted a two-year extension for its obligations at the Umiat oil field in Alaska.
In an update, the Alaskan-focused exploration company said further studies in conjunction with post well testing at its Merlin-1 well has identified additional upside at the oil field.
The Company explained that a discovery at Project Peregrine, where future appraisal drilling is planned, would contribute ‘significant value’ to any development at the Umiat oil field.
In addition, in early August 2021, the Company released its results for 1H21 in which it stated that as at 30 June 2021 the Company had cash resources of A$14.8 million and zero debt.
88 Energy plans to utilise the next 24 months to investigate previous scoping studies and explore possible alternative development scenarios to improve the economics of Umiat.
In regard to its 100% owned Yukon Leases, the Group said it is in ‘advanced discussions’ with nearby lease owners seeking to aggregate resources into a joint development of the area.
Last month, the Company successfully closed an equity placing which raised £12.71 million with a total of 855.8 million new shares being sold to investors at a price equivalent of 1.49p.
The proceeds will support the drilling and logging of its Merlin-2 appraisal well in 1Q22. Overall, the operation is targeting 652 million barrels in the N20, N19 and N18 horizons.
The Company explained that the proceeds will also be used to fund lease acreage payments as well as enable the identification and execution of potential new project opportunities.
Following completion of the placing, 88E said it will have sufficient cash to fund its ongoing working capital requirements and general and administrative overheads for the next year.
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