Stockbroker WH Ireland has told investors in 88 Energy Ltd (LON:88E) to expect a “thoughtful and prolonged approach” from the company in the coming weeks as it advances the Icewine project in Alaska.
88 Energy on Wednesday morning said that the drilling phase of the pivotal Icewine-2 programme is now complete, with the well reaching target depth of 11,450 feet. The vertical well was drilled on schedule and without incident, the Alaska focussed explorer added.
It has now begun wireline logging operations to confirm the measurements and compositions of the appraisal hole, ahead of planned production testing.
The company gave some further details about the forward plans, noting that in early June micro stimulations will be performed in order to calibrate the ‘stress profile’ in the zone of interest, this will be a precursor to the fracture stimulation programme which in turn precedes the production flow testing.
88 Energy noted that it expects the main stimulation programme to be complete in the third week of June, with clean-up of fracking fluid anticipated over a further on to two weeks – suggesting test any initial results are likely to come at least after the first week of July.
The company explained that the Icewine-2 well will then, in July, enter into production testing with the initial flows choked back, to ensure that proppant is not displaced from the reservoir.
WH Ireland analyst Brendan Long added: “positive to have reached TD, no logs yet so too early to assess the resource and we are anticipating a thoughtful prolonged approach vs. a ‘we struck oil’ comment in keeping with the nature of the shale resource being evaluated.
“US oil production continues to grow and thematically 88E should capture that momentum provided the well results deliver the goods.”