88 Energy Ltd (LON:88E) told investors it is on track to drill its next shale well at Project Icewine, in Alaska’s North Slope, in the first quarter of 2017.
The ongoing permitting process for the well has now passed major milestones with no problems and the documents should be in place well ahead of the scheduled spud date for Icewine-2, the company said.
Meanwhile, it anticipates that it will appoint key contractors, including for the rig, in coming weeks.
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Icewine-2 is expected to provide further insight into the scale of the HRZ shale discovery that was unearthed in the first well. Significantly, it will be fracked and flow tested to determine the commercial potential of the shale, which is estimated to hold billions of barrels of oil.
“Operational activity associated with the near term spud of Icewine#2 is ramping up and the company is on the cusp of testing the flow potential of the HRZ resource play,” said managing director Dave Wall.
“Our large acreage position and the quality of the rock means that the potential resource prize is enormous and success would be truly transformational.”
Conventional prospects are stacking up
88 Energy updated investors on its conventional oil exploration programme, where seismic analysis has unearthed a range of preliminary leads.
It said that the forward work programme will mature prospects and leads, and high-grade the best ones into candidates for future drilling.
As part of this process 88 Energy expects to have estimates of the exploration inventory’s resource potential by the end of 2016.
“The conventional portfolio continues to firm up, exceeding our expectations,” Dave Wall said.
Final interpretation and the initial analysis of new seismic data was completed in November.
The first wave of leads are in the Brookian and Beaufortian sequences, which are proved to host hydrocarbons in the region. The company said it now has a diverse conventional Prospect and Lead inventory across the Icewine acreage, in Alaska’s North Slope.
The majority of the leads are seen to be stratigraphic – i.e. comprises multiple overlaying zones – with features such as the slope apron, basin floor fan systems and turbidites.
It also noted that a number of leads are associated with enhanced seismic amplitudes, which is particularly promising as that can indicate the presence of hydrocarbons, and to further investigate the company is conducting AVO (amplitude versus offset) analysis – and initial results are described as ‘encouraging’.
As well as de-risking ahead of drilling the AVO findings will also help the group rank its leads and prospects.