88 Energy Limited (ASX:88E, AIM:88E, OTC:EEENF) (88 Energy or the Company) is pleased to announce successful flow testing of the Upper SFS reservoir in the Company's Hickory-1 discovery well, located in Project Phoenix on the North Slope of Alaska (88 Energy ~75% WI owner).
Managing Director, Ashley Gilbert, commented:
"Outcomes from this test represent a significant milestone for 88 Energy and its shareholders, with the first successful flow of oil to surface achieved at the Company's Alaska projects.
The completion of flow testing in this zone and recovery to surface of light oil, in addition to NGLs and associated gas, confirms our understanding of the substantial potential of these reservoirs. Significantly, these flow rates were achieved from only a 20ft perforated section in a vertical well with a low volume stimulation over a short period. As previously highlighted, production rates in long horizontal production wells are typically multiples of 6 to 12 times higher than tested in vertical wells, as evidenced in many Lower 48 analogues.
Importantly, the Upper SFS zone had not previously been intersected or tested at either Project Phoenix or on adjacent acreage. It is particularly exciting for us to produce oil to surface and demonstrate the producibility of this additionally discovered reservoir. Future plans for the assessment of the commerciality of Project Phoenix will be communicated post analysis of the Hickory-1 program.
We will now proceed to undertake flow testing of the shallower SMD-B reservoir over the coming weeks. This is a zone which has previously been successfully tested on adjacent acreage to the north.
We look forward to continuing to update shareholders on the progress of our Hickory-1 flow testing operations."
Upper SFS flow test results
A 20ft perforated interval in the Upper SFS reservoir was stimulated via a single fracture stage of 241,611 lbs proppant volume. The well was cleaned-up and flowed for 111 hours in total, of which 88 hours was under natural flow back and 23.5 hours utilising nitrogen lift.
The USFS test produced at a peak flow rate of over ~70 bopd. Oil cuts increased throughout the flow back period as the well cleaned up, reaching a maximum of 15% oil cut at the end of the flow test program. Oil rates and cut would have likely increased further should the test period have continued. The well produced at an average oil flow rate of approximately 42 bopd during the natural flow back period, with instantaneous rates ranging from approximately 10 - 77 bopd with average rates increasing through the test period. Importantly, the USFS zone flowed oil to surface under natural flow, with flow back from other reservoirs in adjacent offset wells only producing under nitrogen lift. A total of 3,960bbls of fluid was injected into the reservoir and 2,882bbls of water was recovered during the flow back period, most of which being injection fluid. Total flow rates (inclusive of recovery of frac fluid) averaged ~600 bbl/d over the duration of the flow back.
Multiple oil samples were recovered with measured oil gravities of between 39.9 to 41.4 API (representing a light crude oil).
Additionally, some NGLs were produced but not measured, as was anticipated in the planning phase. The presence of NGLs was demonstrated by samples from the flare line and by visible black smoke in the flare. Historically, NGL prices on the North Slope of Alaska have been similar or slightly below light oil prices and are therefore considered highly valuable. Further work is required to quantify the exact volume of NGLs, which 88 Energy intends to include as part of a maiden certified Contingent Resource assessment at Project Phoenix for the SFS reservoirs.
SMD-B flow testing operations
Preparation for the next state of the Hickory-1 flow testing schedule in underway and will focus on the proven SMD-B reservoir. As with the USFS test, this zone will be independently isolated, stimulated and flowed to surface.
Testing operations are scheduled to complete in April 2024, with the on ground Alaskan team working hard to progress to this next stage as quickly as possible. Weather condition have been particularly challenging with low temperatures and high winds experienced during operations to date.