88 Energy Ltd (AIM:88E, ASX:88E, OTC:EEENF) told investors it had A$10.5mln of cash at the end of the quarter to 30 June, as management and investors eye nearby third-party well drilling.
The AIM-quoted exploration share is up some 93% over the days since Alaska neighbour Pantheon Resources began drilling the Alkaid-2 well, which aims to confirm and production test an existing discovery with a horizontal well.
For 88 Energy, the neighbouring well is of interest because it believes – based on work by the company and its consultants – that the geologies discovered by Pantheon extend into a section of 88 Energy’s Icewine project area (now being referred to as ‘Icewine East’).
88 Energy is preparing farm-out activities for that part of Icewine, with the aim of bringing in a funding partner to support a new phase of exploration activity. The hope for 88 Energy is that Pantheon’s well will further de-risk and encourage investments in the region.
In terms of its own work, 88 Energy today told investor is it anticipating the completion of a new independent estimate of resources for Icewine “early” in its third quarter, meanwhile, it said that planning is underway for a new exploration at Icewine for a 2023 spud.
It noted that Project Peregrine (covering another part of Alaska’s North Slope) continues to be the basis of studies of previous well results to assess future exploration potential and the company reminded investors that multiple drill-ready exploration targets remain untested at Peregrine.
At the Umiat oil field in Alaska a study is underway with a drill operator to assess potential optimised operations to drill cost-effective wells to “unlock further upside” at the field.
Production growth in Texas
Elsewhere, recently acquired non-operated production is up at Project Longhorn.
The second and third well workoverss (out of a planned seven-well workover programme) have now been completed by the operator and production is up to over 650 barrels of oil per day (gross).
88 Energy, which has an average net interest of 73% in the wells, said daily production rates are expected to settle at around 500 boepd gross, of which around 70% will be oil. It will reflect production growth of around 70% since its February entry to the project.
It is now agreed that the operator will accelerate its capital programme, to complete the remaining four well workovers this year – resulting in a US$3.5mln funding requirement, which will see an issue of new 88 Energy shares.
The seven-well programme will be completed earlier than previously anticipated, 88 Energy noted.