88 Energy Ltd (LON:88E) is one of the most exciting companies on London’s AIM market, so says WH Ireland analyst Brendan Long.
The Alaska focussed explorer yesterday announced the start of the Icewine-2 well which is designed to provide a production test of the HRZ shale play.
The Arctic Fox rig started drilling Icewine-2 on Monday, at 19:15 local time in Alaska, and 88 Energy anticipates that Icewine-2 will undergo production testing in late June or early July.
Icewine-2 follows up the previous success of the Icewine-1 discovery well which confirmed the presence of the potentially large HRZ shale and delivered technical readings that were better than expected prior to drilling.
WATCH: 'An exciting time for 88 Energy' - Proactive's Jamie Ashcroft
CLICK HERE: For a daily round-up of all the Proactive news
Production testing will be pivotal for the project’s commercial potential, and as such the programme will be followed closely by investors.
“US Shale oil is clearly back in business,” Brendan Long said in a note.
“Alaska is probably the last state where large scale unconventional resources remain under appraised.”
The analyst added: “We hope the well is at least a technical success such that high quality data is obtained. Production testing should add direct evidence of the potential of the HRZ shale play.
“This is one of the most exciting wells the AIM market will see in 2017 in its own right and because 88Energy is a spearhead for AIM to gain exposure to US shale oil giving it strategic significance in terms of rounding out the AIM offering.”
Dave Wall, 88 Energy managing director, said: "The spud of Icewine#2 represents another milestone for the company and its shareholders and we now look forward to a safe operation, above all else.
“It is only a few short weeks before production testing begins, which could unlock the huge resource potential of the HRZ shale play."