88 Energy Ltd (ASX:88E, LON:88E) has announced a change to its plans for the proposed Icewine 2 well in Alaska where it now intends to drill a vertical well rather than a more complex and more expensive lateral well.
A vertical well is estimated to cost around US$5mln less to drill and the well can be paid for entirely from the group’s current cash position, the company told investors.
It added that there is also greater availability of suitable drilling rigs for vertical wells, which means the tender process is more competitive.
The well will still enable a multi-stage fracking program. Importantly, the vertical well will test both the HRZ and HUE shales at Project Icewine.
The company added that as it will test the production potential of the entire HRZ/HUE interval there is potential for an upgrade to resources.
It is also expected that a vertical well will enhance the group’s data and understanding, which will help identify other ‘landing zones’ for future lateral wells.
“The revision to the well design has resulted in a best of both worlds scenario for 88 Energy and its shareholders,” said Dave Wall, 88 Energy managing director.
“We now have a more efficient, lower cost outcome that optimises achievement of the operational objectives targeted by the Icewine#2 well.”
Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX emerging companies with distribution in Australia, UK, North America and Hong Kong / China.