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88 Energy Ltd

88 Energy details Icewine’s conventional resources after Premier Oil farm-out

Premier Oil agreed to pay US$23mln of costs for the planned Charlie well.

88 Energy Ltd - 88 Energy details Icewine’s conventional resources after Premier Oil farm-out

88 Energy Ltd (LON:88E, ASX: 88E) has provided investors with a new breakdown of its conventional prospect inventory in Alaska, in the wake of yesterday’s news that it is farming-out a 60% in Project Icewine’s Area A.

The new inventory, detailed in a statement, shows the new allocations of net resources.

Specifically, it confirms that in the ‘western play fairway’ the small cap explorer retains some 720mln barrels of net prospective resources (2.4bn barrels gross).

The ‘central play fairway’ is now deemed to give 88 Energy some 193mln barrels of net prospective resources (373mln gross), while the ‘eastern play fairway’ has 96mln barrels (124mln gross).

In total, the company has just over 1bn barrels of net prospective resources (2.89bn gross).

Premier Oil PLC (LON:PMO) yesterday revealed it has acquired a 60% interest in Area A.

Area A contains the Malguk-1 discovery drilled by BP in 1991, which discovered but never tested 251 feet of light oil pay in turbidite sands in the Torok formation, within the recently emerging Brookian play. Premier estimates an accumulation of more than 1 billion barrels of oil in place, based on the original well data and its evaluation of the existing 3D dataset.

Premier will pay the full costs of an appraisal well, dubbed “Charlie-1”, up to a total of US$23mln to test the reservoir deliverability of the Malguk-1 discovery. The well will be drilled and tested in the first quarter of next year.

Charlie-1 is detailed in Friday’s RNS as having 210mln barrels of resources, which represents 63mln barrels net.

On successful completion of the work programme, Premier will have the option to assume operatorship.

Should the Charlie-1 appraisal well prove successful, Premier has the option to earn a 50% working interest in Area B or Area C through spending US$15mln.

Quick facts: 88 Energy Ltd

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Market: AIM
Market Cap: £41.95 m
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