88 Energy pinpoints next Alaskan oil target

88 Energy is gearing up to tap its Merlin-2 well at Project Peregrine in Alaska’s North Slope after pinpointing a spot from a trio of initially permitted locations. The company says the chosen ground could deliver thicker reservoir sections and sands with higher permeability and porosity than its previously completed Merlin-1 well. Merlin-2 is targeting 652 million barrels of oil with an independent geological evaluation giving it a better-than-even chance of success.

According to 88, the Merlin sequel will lie in an area downdip of Merlin-1.

The company says the remaining two zones, along with its Harrier-1 drilling location, which were initially permitted for the appraisal program may form part of a future campaign where it will look to assess the potential of its Peregrine landholdings.

88 Energy looks to be quickly progressing its Alaskan exploits with permitting and planning of Merlin-2 now considered to be at an advanced stage with drilling on track for early 2022. The recent play follows the company’s acquisition of Doyon Drilling’s Arctic Fox rig to sink some 8,000 feet into its snow-capped arctic ground as it looks to complete the Merlin sequel.

The company says its brain trust has put together a production testing program for the Merlin-2 well and will have the program chambered during its initial well site operations. The wireline logging program is the next crucial step and will serve as the geological truth-serum. Contingent on the wireline results, 88 Energy will hope to put the production test into play.

The move to commence drilling at Merlin-2 follows the drilling of the nearby Merlin-1 well where a network of stacked sequences unveiled the N18, N19 and N20 reservoirs in the fruitful Nanushuk formation.

Management says the sands in the N19 reservoir, found through drilling of Merlin-1, represents a previously unmapped target with a strong hydrocarbon signature.

88 Energy will now use its soon-to-drilled Merlin-2 well to penetrate the trio of sequences as it looks to extract more black gold at the second time of asking.

According to independent oil and gas reservoir evaluation outfit ERCE Australia, the Peregrine project’s un-risked mean total prospective resource stands at a solid 1.6 billion barrels of oil. It also gave 88 Energy a 56 per cent geological chance of success.

88 Energy’s Peregrine project stretches across almost 200,000 acres of land and notably is proximal to some bumper recent oil finds.  Earlier this year, global oil heavyweight ConocoPhillips, lifted the lid on a potential payload of more than 750 million barrels of recoverable oil at its Willow prospect just 70 kilometres away.

As 88 Energy edges closer to drilling its Merlin-2 well, the company is walking towards a window of significant opportunity. With a highly prospective project area, encouraging hits in its previous campaign and over 600 million barrels to shoot for, the company is looking at possible 2 billion barrels resource come next year.

Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au