ASX-listed 88 Energy has quickly escalated its chase for a lucrative 647 million barrels of oil by tapping into the giant Alaska North Slope (ANS) basin with drills intersecting three primary reservoirs at its Hickory-1 well.
The company says early interpretations of oil shows in the well cuttings, elevated mud gas readings and high resistivity signatures allude to a hydrocarbon pay. It will be further assessed by wireline logging and a coring program, as drilling continues to target two deeper secondary reservoirs, with the hole planned to a total depth of about 3350m.
Management says the reservoirs were intersected at shallower depths than anticipated with thicknesses encountered consistent with its expectations. All operations, including suspension and demobilisation from the well site, are expected to be completed by the middle of next month.
Flow testing of the Hickory-1 exploration well is also scheduled to take place during the coming Alaskan winter’s operational season.
88 Energy’s first exploration well into its Phoenix project lies a mere 6km from Pantheon Resources’ proposed Talitha-B well. The Talitha discovery contains more than a billion barrels of recoverable oil potential across multiple primary and secondary reservoirs.
That adds intrigue to 88 Energy’s previous suggestion that the prospective reservoir units it was testing were interpreted to extend from Pantheon’s fertile neighbouring acreage. The Alaskan oil explorer believes Phoenix houses an estimated unrisked conventional resource of 647 million barrels of oil after it received an independent assessment from petroleum consultancy Lee Keeling and Associates last year.
The ANS is a prolific oil province and despite being in production decline for several decades, it still produces more than 500,000 barrels of oil a day.
Holding an estimated recoverable 38 billion barrels of oil equivalent, comprised of 50 trillion cubic feet of gas and 28 billion barrels of oil, the ANS is considered to be North America’s biggest conventional oil and gas resource.
Crude oil prices recently climbed to US$74 (AU$111) per barrel, rising for the third straight session amid disruptions in supply. It followed a dispute involving Kurdish authorities halting supply from Turkey’s Ceyhan port.
The International Energy Agency says oil prices will be driven by the balance between the tightening Russian supply and China’s demand growth as the latter reopens following strict COVID-19 lockdowns. The US Energy Information Administration forecasts Brent crude oil to average US$83 (AU$124) per barrel this year.
As the ANS experiences somewhat of a revival, 88 Energy looks to be in the hot seat with early runs on the board at its Hickory-1 exploration well. Time will tell if it can help the ANS rise from the ashes to reclaim its “super-basin” status.
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