88 Energy Limited - Operations Update
· Icewine#2 Well Suspended
Project Icewine - Icewine#2 Production Testing
After careful consideration, the Icewine Joint Venture made a decision to suspend the Icewine#2 well. The Joint Venture believes that results from the well to date support the potential economic viability of the HRZ shale play and are within the range of outcomes achieved at other early stage unconventional plays, despite not achieving a flow rate that is representative of the capability of the reservoir. Demobilisation of equipment was completed over the weekend in
The Joint Venture believes that the flowback data, combined with results to date from core and logs, demonstrates that the HRZ is comparable to other early-stage commercial unconventional plays and that, as per those plays, progressing to horizontal appraisal wells is now the best use of time and money.
The decision to discontinue flow testing at this point in time was undertaken for many reasons, including:
· An internal belief that a more significant work program is now required to meaningfully de-risk the HRZ play further and that the data obtained to date is sufficient to attract a farm-in partner to undertake this program. This is consistent with the natural progression of development in all other unconventional resource plays.
· The Icewine#2 well has already achieved most of the objectives it was designed for: namely acquisition of a more sophisticated logging suite to complement the core from Icewine#1 and to determine whether a large slickwater stimulation could be executed successfully in the HRZ. Additionally, the overpressure of the HRZ was quantitatively proven and the frac was able to traverse into both the upper and lower HRZ with no frac barriers. These results provide the requisite data to confidently design a horizontal well with a multi-stage stimulation that can access the entire height of the formation.
· Evidence during the fracture stimulation operation indicates that an effective frac has been achieved; however, without micro-seismic monitoring, it is not possible to definitively confirm whether an optimal fracture system has been created utilising a vertical well bore. It is considered likely that the fractures created have not maximised contact with the reservoir and that a multi-stage stimulation in a horizontal well is required to achieve the reservoir connectivity necessary to deliver higher flow rates.
The Joint Venture is in the process of engaging with an experienced service provider to provide state of the art analysis and quality control of the existing dataset, undertake additional work and put together an appropriate forward work program to present to potential farminees.
88E Managing Director,
The 88E team is also extremely busy maturing our conventional projects at Icewine, Yukon Gold and the Western Blocks and will provide an update on these projects in the near future."
Icewine#2 Production Testing - Timeline
The Icewine#2 well is located on the
Prior to Winter shut-in (2017) 20% of the stimulation fluids had been flowed back versus a projected minimum target of 30% to gain connectivity to the source rock reservoir.
Flowback re-commenced, on schedule, at 22:30 11th
A production log was run on 12th June and confirmed that all perforations were contributing to flow. As per the flowback design, nitrogen was then introduced gradually to the wellbore from 0845 13th June (AK time), prior to installation of the coiled tube velocity string, to artificially lift stimulation fluids in order to gain connectivity to the reservoir. The flowback rate stabilised at 200 barrels of water per day through an 8/64" choke and then steadily declined to circa 100 barrels of water per day, as per expectation.
Flowback was interrupted, as per the program, on the 15th June 08:00 (AK time) to allow installation of the velocity string. Flow was re-established on 15th June at 20:00 (AK time) with nitrogen introduced into the annulus between the 4.5" casing and the 1.75" velocity string. After displacement of fluid in the annulus, the flowback rate stabilised at 350bpwd through a variable choke to maintain a target wellhead pressure of 200-400psi. This technique decreases the backside pressure in the system and optimises lifting of fluid from the wellbore.
From the 18th June to the 22nd June, adjustments were made to the flowback system to determine the optimal settings for the nitrogen lift operation. Consequently, flowback rates fluctuated between an average rate of 50 barrels of water per day to 120 barrels of water per day. The percentage of hydrocarbon gas in the flowback dropped to 5% at one stage due to an increased nitrogen injection rate, 300 scf/m, which is deemed to have limited the flowback of both water and gas from the borehole. The reduction in productivity is attributed to an effective downhole choke created between the 4.5" annulus and the 1.75" velocity string, limiting the flowback when the nitrogen rate is too high. The nitrogen injection rate was reduced back to 150 scf/m in an attempt to increase flowback of water and gas from the borehole.
The early results from the flowback were within the range of expectations; however, the rate of returned fluid decreased, despite optimised lift settings, and the timeline to achieve the targeted percentage of returned fluid increased significantly. Consequently, and in consideration with the encouragement achieved to date over the entire appraisal program, a decision was made to discontinue testing and the well was suspended on the 30th
Hydrocarbon gas content during the flowback period was predominantly methane (90%) with some heavier elements up to trace C6+. Hydrocarbon rate achieved, with velocity string installed, ranged from 5 - 113mcf/d of gas with an average of 26mcf/d.
Total clean up fluid returned, (net of diesel for freeze protection and any other fluids introduced as part of the current operation), since commencement of flowback on 12th
Pursuant to the requirements of the
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Neil McDonald/Derrick Lee
88 Energy Alaska North Slope Assets Overview
The Project is located on an all year operational access road with both conventional and unconventional oil potential. The primary term for the State leases is 10 years with no mandatory relinquishment and a low 16.5% royalty.
The HRZ liquids-rich resource play has been successfully evaluated based on core obtained in the Icewine#1 exploration well (
Production testing at Icewine#2 concluded on
Significant conventional prospectivity has also been identified on recently acquired 2D and 3D seismic across the project acreage.
A map of the Company's North Slope Acreage can be viewed in the pdf version of this announcement at the link below:
Cautionary Statement: The estimated quantities of petroleum that may be potentially recovered by the application of a future development project relate to undiscovered accumulations. These estimates have both an associated risk of discovery and a risk of development. Further exploration, appraisal and evaluation are required to determine the existence of a significant quantity of potentially movable hydrocarbons.
A Prospective Resources Report by DeGolyer and MacNaughton, was commissioned by 88 Energy to evaluate the unconventional resource potential of Project Icewine in
The Yukon Gold leases are located on the eastern border of the Central North Slope of Alaska and were acquired in 2018. 88 Energy via its subsidiary has a 100% working interest in these leases, totalling 14,190 acres. The leases contain an historic discovery well, Yukon Gold #1, which is currently being evaluated internally. 3D seismic was acquired in early 2018 to assist with this process and results are expected in 4Q2018. The leases are marked in yellow on the above map.
88 Energy is earning a 36% working interest in four leases (totalling 22,711 acres) immediately adjacent to the Horseshoe#1/1A oil discovery well. 88 Energy, with its consortium partners
This information is provided by RNS, the news service of the
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