Upcoming work programmes at 88 Energy Ltd’s (LON:88E, ASX:88E) shale venture in Alaska can draw the attentions of ‘all the oil majors’, according to a report by Sydney based EverBlu research.
Analyst Gavin Van Der Wath, who says 88 Energy is a ‘buy’, reckons the upcoming drilling at project Icewine can double the explorer’s share price.
A successful appraisal well to confirm the shale project’s viability would give the company a value in the range of US$150mln and US$380mln (while upside scenarios approach US$1bn).
It can put 88 Energy in a strong position, according to the analyst.
“We believe that a successful appraisal well, the potential resource size and subsequent scope of commercial development would attract the attention of all the oil majors, placing 88E in a strong negotiating position and allowing the company its pick of partners, should it so choose.”
Summing up the 88 Energy opportunity, van der Wath highlighted: “The company’s primary objective is to assess a new unconventional play with gross mean unrisked recoverable hydrocarbon liquids of 2.6Bbbl.
“An equivalent conventional target of 758MMbbl has also been identified. Compelling prospectivity, confirmed by the project’s maiden well, prompted the decision to drill an appraisal well. Planning and permitting is well advanced and should spud within the next 6 months.
“A successful outcome could see the share doubling to AUD 0.08 per share.”