‘Drill baby drill’ may be the call coming from Washington DC, but in the City of London followers of Alaska-focused 88 Energy Ltd (AIM:88E, ASX:88E, OTC:EEENF) will be thinking ‘deal baby deal’.
The small-cap explorer today once again underlined the untapped potential beneath its feet, with a large internal prospective resource estimate for its Leonis project.
Drilling is planned at Leonis, but likely not until next year. First, the explorer needs to sell a stake in the project via a farm-out, in order to spread risk and manage costs.
This has been the strategy for 88 Energy all along, but, behind today’s estimate is also a broader renewal of confidence around the sector.
With Donald Trump’s America keen to drive forward the domestic oil and gas industry, this was a good time for AIM-quoted 88 Energy to headline a newly estimate of around 800 million barrels for Project Leonis on Alaska’s North Slope.
Now, let’s not get lost in the politics of it all, but suffice to say turning discoveries into oil fields in Alaska is going to less challenging under the Trump administration in the coming years, than it had been under Biden’s during the past four.
So lets stay with 88 Energy – which, over the years, hasn’t been a stranger to big prospective estimates.
Leonis is one of five asset areas in the 88 Energy portfolio. In Alaska, the explorer also has Peregrine as well as Phoenix (which is the more recently active of the trio), meanwhile, in Texas, it has a basket of non-operated production referred to as Project Longhorn by the company. Onshore Namibia, meanwhile, the explorer is opening up a new venture.
At Pheonix, 75%-owned by 88 Energy, there are some 239 million barrels of net contingent resources plus another ‘prospective’ 155 million barrels which will need to be tested by further drilling. Planning is underway to advance this project with a horizontal well, to move closer to unlocking a field development.
Elsewhere, at Peregrine – where a series of wells were drilled in 2022 – a massive 2.4 billion barrel prospective resource has previously been estimated.
New Leonis estimates
88 Energy on Thursday confirmed a multi-reservoir opportunity at the Canning Prospect, part of Project Leonis in Alaska, with hundreds of millions of barrels estimated.
The explorer today unveiled its maiden resource estimate for Canning, seeing up to 798 million barrels of prospective resources from the Canning prospect and the Upper Schrader Bluff (USB) formation.
Today’s resource announcement comes from an internal assessment, which puts the ‘low case’ resource estimate for Canning at 136 million barrels whilst the ‘high case' estimate is pitched at 469 million barrels. The mean estimate comes in at 283 million barrels.
The 88 Energy team is now working on well location selection and planning for an exploration well, Tiri-1, which will be drilled in the first half of next year.
"We are extremely pleased to announce the maiden, internally estimated prospective resource estimate for the Canning prospect,” managing director Ashley Gilbert said in a statement.
“The identification of the Canning prospect comes after an extensive review of data, including newly reprocessed and interpreted Storms 3D seismic data, and the outcome of the recently completed quantitative interpretation study (rock physics, AVO and seismic inversion).
“This work has confirmed significant prospectivity at both reservoir intervals.”
Route to new drilling
Gilbert added: “The Tiri-1 well will be optimally located to test both the Canning and USB prospects, providing shareholders with a multi-zone exploration opportunity of considerable scale.
“The timing of the Tiri-1 exploration well is contingent on securing a farm-out partner, and with our 100% working interest in Project Leonis, we believe there is significant potential to secure a large proportionate carry on any future well.
“Looking ahead, our focus is firmly on advancing the Tiri-1 well at Project Leonis scheduled to drill in Q1 2026 as well as finalising funding to deliver a horizontal well test at Project Phoenix".