Viewers of ‘Ice Road Truckers’ will know the Dalton Highway well, but broker RFC Ambrian believes it may be the key to a resurgence of oil minnow 88 Energy (ASX:88E, LON:88E).
The company is in the process of acquiring an initial 87.5% interest in 99,360 acres onshore the North Slope of Alaska, close to the highway that oil companies use to transport vital equipment and supplies during the treacherous winter months.
The Icewine Project is part of an effort to rebrand the company, formerly Tangiers Petroleum, into an Alaskan shale oil company.
RFC Ambrian believes if it can prove the HRZ Shale a commercial success, “then the upside is huge.”
88 Energy and partner Burgundy Xploration paid an average of US$29 per acre for their licences in the recent North Slope Areawide 2014 licensing round.
Recently, four blocks to the north of the Icewine Project were acquired by Great Bear at an average of US$212 per acre.
Acreage in the Eagle Ford play in Texas, which has similar comparisons to Icewine, has sold recently for more than US$20,000 per acre.
The broker has put a target price of 1p on the stock and given it a ‘speculative buy’ rating calling it a high-risk, potentially high-reward project.
Shares in 88 Energy were down 6% to 0.6p today.
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