88 Energy reveals 381 million-barrel Alaskan oil resource

88 Energy says its maiden net mean prospective resource estimate for its Leonis project on the North Slope of Alaska shows 381 million barrels (MMbbls) of recoverable oil from the Upper Schrader Bluff (USB) formation.

The company’s prospective estimate revealed today indicates an unrisked (3U) net high of 671MMbbls, a 2U best estimate of 338MMbbls and a 1U low of 167MMbbls.

Management says the formation is the same proven production source that feeds the nearby Polaris, Orion and West Sak oilfields to the north-west. It believes those fields provide useful data points for it to be able to measure its petrophysical model for Leonis.

88 Energy says the initial total prospective resource estimate for Leonis follows a review of extensive data, including reprocessed 3D and 2D seismic data, well logs from Hemi Springs Unit-3 and Hailstorm-1 and other wells near its Leonis acreage, in addition to extensive petrophysical analysis and mapping and a dedicated fault mapping study by third-party consultants to assist with prospect definition.

It also says the Leonis prospect is now considered fully-outlined and mapped and it has begun planning for its proposed Tiri-I exploration well to test its Tiri prospect within the company’s acreage.

88 Energy managing director Ashley Gilbert said: “Being strategically located on the North Slope of Alaska, with TAPS running through the acreage and Deadhorse just six miles to the North, Project Leonis represents a significant resource and development opportunity. We have commenced permitting and planning processes for the Tiri-1 exploration well ahead of a future potential drilling event, to target the USB zone.”

The company’s Tiri prospect is modelled from a high-quality dataset including well and recently-reprocessed 3D seismic data, which it says reinforces the technical and commercial case for further assessment. Tiri has been identified as possessing remarkably high porosity, which is estimated to average about 30 per cent of the interpreted pay thickness of 175 feet (53.3m).

The Leonis 10-year leases were awarded in April last year and offer an attractive appraisal drilling opportunity to test the 381MMbbls of estimated net mean unrisked prospective resources. The company holds 100 per cent of the operating interest and a 16.6667 per cent royalty.

Importantly, the prospective resources relate to the mapped area of the USB formation, which the company believes could be effectively tested by a single well. It is undertaking a search for a funding partner ahead of its proposed drilling. 

In addition, while the prospective resources have not been adjusted for phase risk or prospects of development, 88 Energy considers the chance of discovering oil over gas to be 100 per cent.

The company has qualitatively assessed the chance of well development as “probable” upon geological success, given the strategic location of the property close to the trans-Alaska Pipeline System (TAPS) and related key infrastructure, which includes an export pipeline and major service hubs. TAPS is an oil transportation system spanning Alaska and includes the trans-Alaska crude-oil pipeline, 12 pump stations, several-hundred kilometres of feeder pipelines and the Valdez Marine Terminal.

It is one of the world's biggest pipeline systems and the core pipeline itself is an 800-mile (1287km)-long, 48-inch (1.22m)-diameter pipeline that carries oil from Prudhoe Bay on Alaska's North Slope, south to Valdez on the shores of Prince William Sound in south-central Alaska.

Immediate future work for 88 Energy includes the engagement of experienced local support service operator Fairweather to assist in kicking off the planning and permitting for Tiri-1. It will produce a design to drill, log and test the USB zone in a single season and will utilise the existing gravel pad at the location of the previously-drilled Hemi Springs Unit-3 well to reduce establishment costs.

Management says its focus within the Alaskan acreage is fully on the Leonis and Phoenix projects where it expects significant advances in the coming six to 12-month period. It adds that timing for the drilling of the Tiri-1 exploration well is dependent on securing a successful farm-out partner.

It is interesting to note that more recent reviews of old data that can be reprocessed, coupled with application of new geological and geophysical methods, has borne significant advances in the rejuvenation of some fields thought to be nearing exhaustion – especially on the North Slope with its low resistivity.

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