88 Energy awaits further analysis at Merlin-1 well
(88E ) said sidewall cores, mud gas and fluid samples taken from the Merlin-1 well are now undergoing testing with the results expected over the next two to twelve weeks.
Drilling at Merlin-1, which forms part of Project Peregrine, which holds nearly 200,000 contiguous acres on the North Slope of Alaska, initiated in early March. So far, Merlin-1 has been drilled to a depth of 5267ft and has uncovered a potential hydrocarbon-bearing zone.
The Alaskan-focused explorer said recently acquired data from drilling at the Merlin-1 well in Northern Alaska has highlighted the potential of hydrocarbon-bearing zones at the site.
During the drilling of Merlin-1 several prospective zones were encountered that had previously been unmapped which exhibited good shows with potential for pay, subject to results from the testing mentioned above. An initial mapping exercise indicated that these zones may be of similar magnitude in terms of volumetric range as the primary zones.
88E said further work is required to confirm this; however, the early work is ‘encouraging.’ Testing at Merlin-1 is intended to determine oil saturation, oil typing, PVT characteristics, porosity, permeability and rock mechanics while cuttings will also go through a Volatiles Analysis Service to assist with the interpretation of the results from the well.
The results from Merlin-1 will be integrated into a final petrophysical interpretation. Managing Director of 88E, David Wall, stated: "The oil shows and other encouragement seen in the Merlin-1 well bodes well for the potential at Project Peregrine and we look forward to providing the results from the laboratory analysis over the coming weeks.”
88E has also been closely monitoring activity nearby to the northern border of its Project Icewine acreage, where a flow of light oil from the Kuparuk has been reported from the Talitha-A well. In addition, further insights into the wettability of the Kuparuk formation may also prove to have positive ramifications for its previous interpretation of this horizon.
“It is also highly positive to see pay zones and a flow rate of light oil achieved from zones on adjacent acreage that are also prospective at Project Icewine, where an internal review has commenced to determine the significance of the neighbouring results,” commented Wall.
View from Vox
Shares in 88E have seen a near three-fold increase in value since the start of 2021 and the recent news that it had commenced drilling at the Merlin-1 well marks “an exciting and pivotal time”. The stock was trading 10.10% higher this morning at 1.33p following the news.
Drilling at the Merlin-1 well follows the Crude Oil WTI Index reaching its highest level since October 2018 last month, with the commodity reaching highs of $67.98 per barrel.
88E price chart
Reasons to 88E
Project Portfolio Across Alaska’s North Slope
The Alaskan explorer completed its acquisition of XCD Energy, which holds a 100% Working Interest in the highly prospective Alaskan North Slope, back in August 2020. The merged entity has formed a diversified portfolio of exploration projects on Alaska’s North Slope.
The combined company will have increased scale, market presence along with higher funding capability and trading liquidity across the ASX and London AIM exchanges.
The three key projects include Project Icewine, Yukon leases and Project Peregrine with the assets at various stages of development, the company previously outlined this summer.
In late 2020, 88E was also formally re-assigned the "Area A" leases at Project Icewine meaning its working interest in around 40% of the project has increased from 30% to 75%.
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