88 Energy Limited - Operations Update
Project Icewine - Icewine#2 Production Testing
As at 0530 26th June (AK time), the flowback rate was averaging 30 barrels of water per day on a variable choke setting (currently 36/64"). Wellhead pressure has been managed lower to 32psi to reduce back pressure in the system.
Since the last update, the reduction in nitrogen injection rate to minimise the impact of a perceived downhole choke has not resulted in an increase in the rate of flowback of stimulation fluid or gas.
During this period there has been no meaningful change to the composition of the returned gas and fluid. Flowback is considered to be gas and 100% low salinity stimulation fluid, which is not considered representative of the content of the reservoir. It is expected that, if contact with the reservoir is achieved, the salinity of the returned fluid will increase by an order of magnitude. This has not occurred to date.
Hydrocarbon gas content continues to be predominantly methane (90%) with some heavier elements up to trace C6+. The percentage of hydrocarbon gas in the flowback gas increased from 5% to between 11 and 13% when the nitrogen injection rate was reduced, suggesting that a positive impact on the downhole choke has been made.
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
The early results from the flowback were within the range of expectations; however, given the reduction in rate of returned fluid, despite the optimised lift settings, the timeline and forward plan to achieve the return of 30% of injected fluid is being re-assessed.
88E Managing Director,
The Joint Venture remain confident that the reservoir quality and geomechanical properties of the HRZ indicate that it has the requisite ingredients to attract a farm-in partner.
We appreciate that investors want clarity and certainty in relation to the results from the Icewine#2 well and the team is working hard to provide these."
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. 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 was 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
Media and Investor Relations:
Finlay Thomson, Investor Relations Tel: +44 7976 248471
Dale Bryan Tel: + 61 8 9268 2829
Cenkos Securities Tel: + 44 131 220 6939
Neil McDonald/Derrick Lee
Pursuant to the requirements of the
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 (
Significant conventional prospectivity has also been identified on recently acquired 2D and 3D seismic across the project acreage.
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
Quick facts: 88 Energy Ltd
Market Cap: £208.81 m
NO INVESTMENT ADVICE
The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...FOR OUR FULL DISCLAIMER CLICK HERE