ASX-listed explorer 88 Energy has reached another milestone in a major Alaskan oil basin. The company has received formal approval over the formation of its Toolik River Unit which comprises leases within the western and central area of Project Phoenix. Grouping the leases together allows 88 Energy to push ahead with further exploration in the Alaska North Slope oil field and investigate pathways to development.
The Alaskan Department of Natural Resources, Oil and Gas Division, has approved the unification of more than 40 leases within Project Phoenix and given the nod to 88 Energy’s drilling and non-drilling plans for the west and central part of the acreage. The new approvals have extended the leases out to February 2028.
Bringing the acreage together will see 88 Energy work towards shoring up Hickory-1 well, tipped to spud – that is, the first time the drill cracks through the rocks – in mid-March.
Success at Hickory-1 is critical for 88 Energy as the well’s performance determines what the company does next. Vertical exploration of Hickory-1 will be followed by a flow test in the 2023/2024 northern hemisphere winter.
Hickory-1 is strategically located near the Trans Alaskan Oil Pipeline and near one of the area’s key all weather roads. The well will be testing up to six different reservoir targets in the coming months, estimated to hold 647 million barrels of oil. Hickory-1 is a strong nearology play as mounting data suggests the well has a similar porosity and clay content with oil producing neighbour, UK-listed Pantheon Resources.
Outside of drilling into the crust, the formalisation of the Toolik River Unit in Project Phoenix allows 88 Energy to begin assessing other parts of its Alaskan acreage. Going forward the company will use various evaluation methods, including both amplitude-variation-offsets and simultaneous seismic inversion to hunt out the other sweet spots in the tenure.
So far the oil explorer has built a track record of success in the harsh Alaskan climate, with the company noting receiving the tick of approval from the Alaskan government supports the work it has completed.
88 Energy Managing Director, Ashley Gilbert said: “This is a further demonstration of the strong support that 88 Energy, and the broader industry, enjoys from the State of Alaska.”
Positive news from Hickory-1 may even allow 88 Energy to engage an oil rig at former oil pads in the area and look to reassess data from the Icewine-1 well.
Alaska’s North Slope oil basin is seeing a flurry of activity as energy security becomes a key priority in the years ahead as countries look to move away from Russian sources of oil.
88 Energy is one of several oil companies looking to be part of the Alaskan North Slope revival. Once a major oil basin, the volume of oil pushing through the Trans Alaskan Pipeline System dwindled to just 500,000 barrels per day, a massive 75 per cent drop its peak volume in the 1980s.
Looking further ahead, 88 Energy can pursue further exploration and assess the potential commercialisation of the acreage and what pathways to development may look like.
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