88 Energy (88E) , an Alaska-focused hydrocarbon explorer, issued a summary of results from its flow testing programme at the Hickory-1 discovery well, part of 88 Energy's flagship Project Phoenix on Alaska's North Slope.
88E conducted two tests at Hickory-1, one each for the Upper SFS and SMD-B reservoirs (see map below). The USFS reservoir produced at a peak flow rate of 70 bopd of light oil with c. 40-degree API oil gravity under natural flow; while the SMD-B reservoir registered a peak flow rate of 50 bopd of light oil with c. 39-degree API oil gravity under nitrogen lift.
Both tests achieved flow rates from low-volume stimulations over short 20ft vertical intervals, in line with expectations based on results from Pantheon Resources' adjacent acreage. However, unlike Pantheon's results, 88E achieved oil to surface from the USFS reservoir under natural flow.
Next, 88E will seek independent Contingent Resource declarations for both reservoirs, based on the observed flow of hydrocarbons to surface. These are expected in H2 2024 and will add to the previously declared 2C contingent resource of 250 mmboe for the deeper BFF reservoir.
Simultaneously, 88E will begin integrating the flow test results into existing models in line with Project Phoenix's development schedule, with commercialisation efforts progressing in parallel.
View from Vox
88 Energy's successful flow test of Hickory-1 represents a major value inflection point for Project Phoenix on Alaska's North Slope, further bolstering its economics and delivery schedule. The discovery well successfully flowtested 2 reservoirs - the USFS and SMD-B, producing peak flow rates of 70 bopd and 50 bopd respectively of light oil to surface. Impressively, USFS achieved oil to surface under natural flow. These results complement the deeper BFF reservoir's existing 250 mmboe contingent resource. In total, 88E is targeting 647 mmboe of prospective oil resources at the site.
With both flow tests now complete, 88E will seek independent resource assessments for the two reservoirs. At the same time, the company will begin integrating the flow test results into its development models. Hickory-1 is a vertical well, designed for testing only. For production, long horizontal wells are planned, expected to deliver 6-12 times greater flow rates than what was observed during the flow tests.
Positive results from multiple reservoirs means significant upside in future development via multiple commercialisation options. These include a farm-out to a strategic partner or early capital-light production, given the acreage's infrastructure advantage of being next to the Dalton Highway and Trans-Alaskan Pipeline System. The project benefits from the ability to produce concurrently from multiple reservoirs in a single development scenario.
Project Phoenix is being jointly developed by 88 Energy and Burgundy Xploration. 88E has a 75% stake in the acreage. As of March 31, 2024, 88E is fully funded to develop Project Phoenix and its other assets in Alaska, Texas, and Namibia.
88E shares gained 4.65% on the announcement.
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