ASX listed 88 Energy is still on track to spud its Charlie-1 appraisal well at its Project Icewine on Alaska’s prospective Central North Slope by next February after successfully finalising a three way farm out agreement signed in August.
In doing so, the Perth-based company may be on the pathway towards discovering nearly half a billion barrels of oil for itself.
As operator, 88 Energy retains a 30% working interest in Area A, which is also known as the Western Play Fairway, whilst London-listed Premier Oil has farmed-into the project for a 60% stake. The remaining 10% working interest is currently in the hands of Burgundy Xploration.
The total gross mean prospective resource across the seven stacked targets to be intersected by Charlie-1 is 1.6 billion barrels of oil, with 480 million barrels attributable to 88 Energy, according to the company.
Under the terms of the agreement, Premier Oil will pay up to USD$23 million to drill Charlie-1 in order to test the reservoir deliverability of what is known as the “Malguk-1” discovery.
The drilling is anticipated to start in February, with flow testing expected to conclude by April.
In addition to the finalisation of the farmout agreement, Charlie-1’s operational plan was also given the green light by Alaska’s Department of Natural Resources earlier this month.
Charlie-1 has been designed as a step out appraisal of Malguk-1 that was drilled by BP Exploration in 1991.
Malguk-1 encountered oil shows with elevated resistivity and mud gas readings over multiple horizons during drilling, but was not tested due to complications towards the end of operations which resulted in a lack of time before the close of the winter drilling season.
It was also drilled using vintage 2D seismic, which was insufficient to adequately determine the extent of any of the prospective targets encountered.
In its attempt to invigorate the project’s upside, 88 Energy subsequently undertook a revised petrophysical analysis, which identified what is interpreted as a bypassed pay zone in the Malguk-1 well.
The company also completed the acquisition of modern 3D seismic in 2018 in order to determine the extent of the discovered oil accumulations.
It is now expected that Charlie-1 will intersect seven stacked prospects, four of which are interpreted as oil bearing in Malguk-1 and are therefore considered appraisal targets.
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By Matt Birney
