88 Energy continues to progress Project Icewine and Project Peregrine in Alaska
The Alaskan-focused explorer outlined that it had finalised a large independently assessed resources estimate at its Project Icewine after integrating the results from the Charlie-1 well.
The group said in-house analysis has since commenced on various commercialisation options for the gas condensate discovered in the Torok Formation by 88E's Charlie-1 well in 2020.
The company said its farm-out process for 2022 drilling at Project Icewine commenced during the period. The "Area A" leases at Project Icewine were also formally re-assigned to 88 Energy while the rationalisation of non-commercial leases also occurred in the quarter.
At its Project Peregrine, located in the NPR-A region of the North Slope of Alaska, the group executed a farm-out in December with Alaska Peregrine Development Company (APDC).
The Merlin-1 well is scheduled for spud in mid-late February 2021 and is targeting 645m barrels of gross mean prospective resource to commence immediately following completion of operations at Merlin-1, subject to results from Merlin-1 and weather. Harrier-1 is targeting gross mean prospective resource of 417 million barrels*. Harrier-1 is expected to cost ~$7m.
The Company said that APDC is expected to earn 50% in Project Peregrine by contributing US$11.3m towards the cost of the Merlin-1 well (estimated gross cost US$12.6m) while 88E will contribute $1.3m, representing its 50% share over and above a US$10m carry.
88E told investors that the permitting and planning work related to the drilling of up to two wells at Project Peregrine, expected to commence in February 2021, remains on schedule. The Harrier-1 well will commence drilling once operations have been completed at Merlin-1.
88 Energy is carried for the first US$10m of an estimated US$12.6m total expenditure, in exchange for a 50% working interest in the project, as part of a farm-out agreement.
Shares in 88 Energy have increased by over 70% in value since the beginning of November 2020 following recent positive news that its wholly owned subsidiary, Regenerate Alaska Inc, has been named highest bidder on Tract 29 in the 2021 Coastal Plain Lease Sale.
Tract 29 comprises 23,446 acres and is adjacent to 88 Energy's existing Yukon Leases as well as the Point Thomson gas condensate field, which is currently in production. Shares in 88 Energy opened 2.70% higher this morning at 0.57p following the announcement.
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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