88 Energy Limited (ASX: 88E) ("88 Energy" or the "Company") provides the following update related to the upcoming drilling of the Charlie-1 appraisal well at Project Icewine, located on the Central North Slope, Alaska.
· Farm-out with Premier Oil Plc ("Premier") finalised - completion documents executed
· Plan of Operations for Charlie-1 appraisal well approved
· Operational activity for Charlie-1 progressing to plan for February 2020 spud
All conditions precedent to the farm-out agreement between 88 Energy, Premier and Burgundy Xploration, signed in August 2019, have been satisfied. Consequently, execution of the final agreements took place on 26th November 2019.
The Alaska Department of Natural Resources approved the Plan of Operations for the Charlie-1 appraisal well on 22nd November. The Plan of Operations is one of the key major permits required for drilling. The final major permit is scheduled for submission in December, with approval expected in January ahead of the scheduled February spud date.
All other contracting and logistical work is proceeding as planned ahead of the scheduled February 2020 spud date.
About the Charlie-1 Appraisal Well
The Charlie-1 appraisal well has been designed as a step out appraisal of a well drilled in 1991 by BP Exploration (Alaska) Inc called Malguk-1. Malguk-1 encountered oil shows with elevated resistivity and mud gas readings over multiple horizons during drilling but was not tested due to complications towards the end of operations, which resulted in lack of time before the close of the winter drilling season. It was also drilled using vintage 2D seismic, which was insufficient to adequately determine the extent of any of the prospective targets encountered.
88 Energy subsequently undertook revised petrophysical analysis, which identified what is interpreted as bypassed pay in the Malguk-1 well. 88E also completed acquisition of modern 3D seismic in 2018, in order to determine the extent of the discovered oil accumulations. Charlie-1 will intersect seven stacked prospects, four of which are interpreted as oil bearing in Malguk‑1 and are therefore considered appraisal targets. 88 Energy will operate Charlie-1, via its 100% owned subsidiary Accumulate Energy Alaska, Inc, with cost of the well to be funded by Premier Oil Plc up to US$23m under a recent farm-out agreement. Drilling is scheduled to commence in February 2020 with flow testing anticipated to conclude in April 2020. The total Gross Mean Prospective Resource across the seven stacked targets to be intersected by Charlie-1 is 1.6 billion barrels of oil (480 million barrels net to 88E). Refer announcement dated 23rd August.