88 Energy Ltd (AIM:88E, ASX:88E, OTC:EEENF) updated investors on its flow testing results from the Hickory-1 well, in Alaska.
The vertical well, drilled in February 2023, was tested in its two primary target reservoirs, the Upper SFS (USFS) and SMD-B.
The Upper SFS reservoir showed a peak flow rate of around 70 barrels of oil per day (bopd) with a maximum oil cut of 15%, while the SMD-B reservoir had a peak flow rate of around 50 bopd with a maximum oil cut of 10%.
Notably, the USFS zone was able to flow naturally to the surface without the aid of nitrogen lift, a notable result given that adjacent wells have required such assistance.
Oil samples from both zones are currently being analysed, with the results expected during the third quarter.
The results are expected to help confirm the reservoir fluid characteristics and support an Initial Contingent Resource assessment for the Upper SFS, Lower SFS, and SMD-B zones.
It will also guide the next steps in Project Phoenix, potentially leading to a horizontal well at the existing Bluffs gravel pad location.
Partner talks
Also, the company noted that its venture partner in Project Phoenix, Burgundy Xploration LLC, was required, under a ‘standstill agreement’, to pay its share of project costs by 15 August, with proceeds coming by either a public listing or a private capital raise.
As it is awaiting progress on its public listing, Burgundy paid the company $350,000 of the obligation and 88 Energy has agreed to extend the standstill arrangement.
In a statement, 88 Energy noted that should the obligation remain unpaid, Burgundy is required to transfer its 50% interest in certain licences to the company.
The extended standstill arrangement has a new deadline of 31 December.
Meanwhile, also, advanced discussions are underway in relation to a potential transaction whereby Burgundy would provide a carry to 88E across an anticipated 2025/26 work program to include (but not be limited to) the drilling, completion and extended flow testing of a horizontal well on the Dalton Highway in return for additional working interest in the project.
Such a transaction would be subject to Burgundy raising new capital.