Highlights
- Dual reservoir success at Hickory-1 with second light oil discovery at the SMD-B reservoir.
- Peak flow rate of ~50 barrels of oil per day (bopd) of light oil (measuring approx. 39-degree API oil gravity, under nitrogen lift).
- The SMD-B reservoir showed little to no measurable associated gas flow (low Gas-oil-Ratio (GoR), which validates the pre-test analysis.
- Hickory-1 has now delivered two successful oil flows and three independent discoveries:
-SMD-B (today鈥檚 result): with a peak flow rate of ~50 bopd of light oil (measuring approx. 39-degree API oil gravity, under nitrogen lift).
- Upper SFS (USFS) (previously announced on 2 April 2024): with a peak flow rate of over 70 bopd of light oil (measuring approx. 40-degree API oil gravity, under natural flow).
- Both flow rates result from low volume stimulations over small 20ft perforated intervals in vertical well.
- Previously announced Basin Floor Fan (BFF) Gross Best Estimate (2C) Contingent Resource of 250 Million Barrels of Oil Equivalent (MMBOE) (refer 88E ASX release dated 6 November 2023)
- Quality and deliverability of both SMD-B and USFS demonstrated via oil production to surface with the USFS reservoir producing under natural flow 鈥� positively differentiating Hickory-1 from results on adjacent acreage.
- It is anticipated that these reservoirs will be developed from long horizontal production wells which typically produce at multiples of between 6 to 12 times higher than vertical wells. Project Phoenix also benefits from the ability to produce concurrently from multiple reservoirs in a single development scenario.
- Well testing results from the current field season confirm long-held views of the producibility of multiple reservoirs at Project Pheonix.
- As such, the Hickory-1 flow test results can be rightly characterised as in-line with those observed from equivalent reservoirs on adjacent acreage. Importantly, the performance of the USFS reservoir exceeded expectations, with the well flowing naturally with increasing oil cut.
- The results from the Hickory-1 flow tests permits an independent Contingent Resource assessment for both the SFS and SMD reservoirs; expected to be complete during 2H 2024.
- Project Phoenix JV to conduct post-test studies for integration into existing models allowing refined development planning for all reservoirs; studies to commence 2H 2024.
- Commercialisation options to be advanced in parallel, including farm-out to a strategic development partner and/or early, capital-lite production, given proximate infrastructure advantages (Hickory-1 next to Dalton Highway and Trans-Alaskan Pipeline System (TAPS)).
88 Energy Limited (ASX:88E, AIM:88E, OTC:EEENF) (88 Energy or the Company) is pleased to announce further successful flow test results from the Company鈥檚 Hickory-1 discovery well, located in Project Phoenix on the North Slope of Alaska (88 Energy ~75% WI owner).
Managing Director, Ashley Gilbert, commented:
鈥淗aving now successfully demonstrated light oil flow from two reservoirs at Hickory-1 in recent weeks, it is clear that this is a significant milestone in the history of 88 Energy. The USFS success represents the first time that we have successfully flowed oil to surface in Alaska 鈥� and under natural flow 鈥� as well as being the first time we have confirmed a light oil discovery of substantial scale in close proximity to the critical Dalton Highway and Trans-Alaskan Pipeline System infrastructure. To then achieve a second successful flow of light oil from the SMD-B reservoir, with a low gas/oil ratio, is an outstanding outcome for 88 Energy and its shareholders.
The flowing of light oil from multiple reservoirs demonstrates the potential that this acreage holds for our shareholders, positioning the Company to grow and extract value from Project Phoenix via multiple potential development and commercialisation pathways. These include farm-out to a strategic partner in pursuit of a carry towards a development proposition and/or accelerated, capital-lite production given the highly development-friendly location of Hickory-1 within the North Slope. Development of these reservoirs is anticipated to be via long horizontal production wells, with numerous production analogues elsewhere demonstrating many multiple times the flow rates achieved from vertical wells. Detailed evaluation of these development options, and pursuit of the optimal pathway, is the process that we are now set to undertake over the coming months. This work will be undertaken alongside the assessment of independent Contingent Resource declarations for the SFS and SMD reservoirs at Hickory-1, which will be additive to the BFF Contingent Resource previously declared. It is a busy and exciting time ahead for 88 Energy.鈥�