88 Energy Ltd (AIM:88E, ASX:88E, OTC:EEENF) has announced a second light oil discovery at the Hickory-1 well, part of Project Phoenix, on Alaska’s North Slope.
The well flowed at a peak flow rate of approximately 50 barrels per day from a vertical section of the SMD-B reservoir, with the oil quality measuring 39 degrees API.
It follows the previous positive test result from the well’s Upper SFS (USFS) reservoir, which achieved a flow rate of over 70 bopd with similarly high-quality light oil.
88 Energy highlighted that its intended development plan would see the field established using ‘long horizontal wells’ which would deliver production “typically at multiples of between 6 to 12 times higher than vertical wells.”
Managing director Ashley Gilbert, in a statement, described the well testing successes as a significant milestone in the company’s history.
“The flowing of light oil from multiple reservoirs demonstrates the potential that this acreage holds for our shareholders, positioning the company to grow and extract value from Project Phoenix via multiple potential development and commercialisation pathways.
“These include farm-out to a strategic partner in pursuit of a carry towards a development proposition and/or accelerated, capital-lite production given the highly development-friendly location of Hickory-1 within the North Slope.
“Development of these reservoirs is anticipated to be via long horizontal production wells, with numerous production analogues elsewhere demonstrating many multiple times the flow rates achieved from vertical wells.”
Gilbert also told investors that a detailed evaluation of the test data will be undertaken over the coming months, which will result in a new independent contingent resource assessment for the SFS and SMD reservoirs.