Proactive Investors - Run By Investors For Investors

88 Energy investors continue to wrestle with Icewine-2 as the wait for a ‘representative result’ continues

The wait continues for a 'representative result' as the well continues to flow back mostly fracking fluid.
oil and gas operations
88 Energy shares were down 7.2% on Tuesday

Investors continue to wrestle with 88 Energy Plc (LON:88E) and the ongoing programme at the Icewine-2  well in Alaska.

The company is still waiting for the well to start providing it with ‘representative results’ that can be used to judge the commercial feasibility of what is potentially a billion barrel resource.

Tuesday’s update informed investors that the well is still slowly yielding fracking fluid and whilst gas is now starting to come through the targeted hydrocarbons are yet to emerge – specifically, it is flowing 55 barrels of fluid and 2-4 thousand cubic feet of gas per day.

So far around 19% of the fluid injected into the shale has been recovered, and 88 Energy says more must be produced before Icewine-2 can provide a representative result, but, it also noted that a decision will have to be made about the company’s plans for the well over the coming fortnight.

Whilst 88 Energy has emphasised that the programme remains in its early stages, the group’s recent share price movement (it is down some 51% over the past three months) suggests that the market isn’t waiting too long to make its mind up.

Brendan Long, analyst at WH Ireland, in a note, said: “The specific well result is perplexing relative to the behaviour of a typical commercial shale oil well and we presume the focus has shifted from proving a commercial concept with oil flow to better understanding the resource and the optimal completion strategy.

“The presence of gas is promising as gas expansion is what drives oil to the well in most shale oil wells.”

Long noted that the gas flow amounts to less than one barrel of oil equivalent, and said: “. So the question is about whether the resource / completions can produce at rates that are hundreds of times higher bearing oil.”

He added: “Conceptually, we still like 88 Energy and understand the prize for unlocking their resource is huge, nonetheless we are underwhelmed by this specific well result.”

88 Energy shares were down 7.2% on Tuesday, trading at 1.88p.

View full 88E profile View Profile

88 Energy Ltd Timeline

Related Articles

Exploration oil well
November 24 2017
The company has exploration and development upside with its suite of North African oil assets
Green energy
April 10 2018
PowerHouse Energy has been busy over the past year, establishing its demonstration plant in the UK, signing deals to develop a hydrogen bus, and even trialling its technology in Qatar ahead of the 2022 FIFA World Cup
oil well
April 27 2018
A cash flow model - assuming one new IOsorb plant is added each year between 2019 and 2021 - gives a price target of 35p/share

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

© Proactive Investors 2018

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use