Shares in 88 Energy (LON:88E) rose 19% in early trade after the Alaska-focused oil exploration firm released some encouraging data from its first exploration hole.
The company said Icewine-1 well achieved all of its “primary unconventional objectives”.
Drilled to 11,600 feet its target was the HRZ shale. Early analysis reveals 88’s portion of the HRZ to be in the “thermal maturity sweet spot”.
The company said oil shows were recorded in cuttings brought to the surface during drilling. There was also a “pronounced increase” in heavy gas fractions.
Two cores were cut and have been sent for analysis. The first will provide a broader insight into what could be contained within the HRZ.
The second, taken from the underlying Pebble Shale, will “provide valuable information on the bottom sealing potential for the HRZ”.
Icewine-1 was also used to assess two conventional reservoir targets - Kuparuk sands and the Brookian sequence.
The latter, the shallower of the two, was described as having “excellent reservoir quality and hydrocarbon shows”.
The former was host to a 58 foot layer with the potential to host oil and/or gas and had “elevated gas readings”.
“The reservoir quality in this Kuparuk sand interval is substantially higher than anticipated, which is extremely positive for deeper conventional prospectivity on the Project Icewine acreage,” the company said.
Managing director Dave Wall said 88 now has “excellent data” to evaluate “the potentially huge unconventional prize on the Project Icewine acreage”.
“Whilst lab evaluation has only just commenced, early indications for the play at Project Icewine are positive, with a large portion of the acreage interpreted to be within the thermal maturity sweet spot,” he added.
“Additionally, the intersection of high quality reservoir at depth in the Kuparuk sands is a major boost to the conventional potential at Project Icewine.
“Reservoir quality was always considered a key risk at this horizon and the recent observations from Icewine-1 have substantially mitigated this.
“These deeper sands complement the already prospective conventional horizons in the shallow Brookian sequence, as previously reported.”
Project Icewine covers 272,422 acres of Alaska’s North Slope, host to the giant Prudhoe Bay discovery.
It is worth pointing out that while remote, the area is right on the main highway and only 35 miles from a pump station, so it is in the sweet spot logistically, too.