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88 Energy nails “milestone” second oil flow in Alaska

A light oil sample from 88 Energy’s SMD-B flow test. Credit: File

88 Energy (ASX: 88E) has delivered a second light oil surface flow discovery of 50 barrels per day from the SMD-B reservoir in the Hickory-1 well at its Phoenix project in Alaska.

Importantly, the company says the discovery has little to no measurable associated gas flow. The SMD-B discovery follows hot on the heels of the deeper Upper Slope Fan System (USFS) reservoir intersected in Hickory-1 that surface flow-tested 70 barrels per day of light oil.

Management says the Hickory-1 flow tests highlight the quality and deliverability of both the SMD-B and USFS reservoirs for surface oil production under natural flow, which is in stark contrast to adjacent competitor tenement acreage results. The SMD-B and USFS flow rates are the culmination of low-volume stimulations over small 20-foot perforated intervals in the vertical well.

The well flowed for 84 hours using nitrogen lift throughout the test period. Multiple recovered samples measured American Petroleum Institute (API) oil gravities of between 38.5 and 39.5. Pressurised oil samples collected from both the SMD and USFS reservoir tests will now undergo further laboratory analyses.

Having now successfully demonstrated light oil flow from two reservoirs at Hickory-1 in recent weeks, it is clear this is a significant milestone in the history of 88 Energy. To achieve a second successful flow of oil from the SMD-8 reservoir, with a low gas/oil ratio, is an outstanding outcome for 88 Energy and its shareholders.
88 Energy managing director Ashley Gilbert

The high-impact and highly-prospective Phoenix project that covers 62,324 acres is an advanced appraisal/pre-production oil and gas play that is favourably located along the northern landward margin (North Slope) of Alaska, south of Prudhoe Bay. Northwards along the east-west Alaskan continent margin, major producing oil fields include Point Thomson, Prudhoe Bay, Kuparak, Oogaruk and Western North Slope.

Utilising petrophysics and downhole wireline logging techniques in Hickory-1, 88 Energy has identified three hydrocarbon-bearing pay zones with total porosity of between 9 and12 per cent. The deepest horizon, the Basin Floor Fan (BFF), contains a gross best estimate (2C) contingent resource of 250 million barrels of oil equivalent.

The recently-discovered light oil-producing USFS and SMD-B reservoirs are at shallower depths overlying the BFF. Multiple stacked reservoirs enhance the commercial opportunities available for development and production –especially in light of the excellent existing infrastructure (Dalton Highway and Trans-Alaskan Pipeline System).

The company is planning to release independent contingent resource assessments for both reservoirs during the second half of this year.

88 Energy is powering on with its Phoenix project and the successful light oil flow test on the shallow SMD-B reservoir further enhances its petroleum development and production profile and commercialisation opportunities.

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