88 Energy spuds potential company maker in Alaska

North American-focused oil producer 88 Energy has spudded its Merlin 2 well in Alaska, chasing what could be a potential company-making 652 million barrels of oil prospect following up last year’s Merlin 1 discovery. Merlin 1 didn’t flow oil to surface, however post-well analysis successfully demonstrated the presence of light oil with 41 feet of net payzone across three reservoir targets.

Merlin 2 is an 8,000 foot well in the Project Peregrine area, with the three potential horizons in the host Nanushuk Formation also part of the Merlin 1 plan. However, this time 88 is planning to run a more sophisticated wireline logging program, including the collection of down hole samples and side wall cores.

The company says initial drilling for Merlin 2 will reach a depth of approximately 2,000 feet, with the surface casing then installed and the Blow Out Preventer, or “BOP” system tested. It is anticipated the process will take approximately one week to complete.

88 will then deepen the well through the target horizons in the Nanushuk Formation to the planned 8,000 foot total depth. The second phase of deeper drilling is anticipated to take up to approximately four weeks.

Project Peregrine is a 789 square kilometre spread in the NPR-A oil region of the North Slope of Alaska, sitting close to recent discoveries in the Nanushuk formation. 88 Energy has a 100 per cent working interest in the project.

Another nearby area of focus for the oil producer, Project Icewine, recently received a boost after light oil was recovered across a brace of separate production tests at fellow explorer Pantheon Resources’ Talitha-A well, about 4.5 kilometres from the Icewine acreage.

According to management, the results of Pantheon's Talitha-A well, together with its previously drilled Alkaid-1 well, will be included in a re-evaluation of 88 Energy's Icewine-1 well data set.

88 Energy will incorporate Pantheon's latest findings into an independent prospective resource report for project Icewine's eastern leases in the months ahead.

The company also widened its American presence recently with the purchase of a 75 per cent stake in Texas oil player Big Horn Energy that is currently producing around 300 barrels of Permian Basin oil per day.

88 will spend US$9.7 million to take a majority share of Bighorn Energy’s 32 wells across nine leasehold areas where it is targeting a doubling of production by the end of the year.

Should it prove successful and confirm a discovery containing more than 650 million barrels of oil, the news will likely be transformational for the company propelling it into the pantheon of significant Alaskan oil producers. Given the sharp focus currently being trained on global oil supplies, 88 Energy could see itself stepping into the breach at exactly the right time.

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