03:00 Tue 23 Oct 2018
88 Energy Limited - Conventional Portfolio Update
23rd
Conventional Portfolio Update
Highlights
· Icewine 3D seismic inversion substantially complete for both shallow and deep horizons
o Discrete geobodies (containers) are now mapped in three dimensions in the Schrader (topset) and Torok (basin floor fan) horizons
o Increase in gross mean prospective resource to 2,896 MMBO (2,211 MMBO net to 88E)
· Updated rock trending models combined with 3D seismic inversion products highlights better than expected potential reservoir quality within the Torok
· Farm-out process continues as planned, with deal targeted prior to year-end 2018
Overview
The processing of the Icewine 3D seismic, acquired in 1Q2018, has entered its final phase, with interpretation of the inversion product largely complete. This inversion product has now been integrated into the mapping effort and has allowed prediction of hydrocarbon saturation in the shallow Schrader sequences as well as predicting where best reservoir quality is likely to be encountered in both the Schrader and deeper Torok sequences. Significantly, each of these horizons has been penetrated by historic wells (most notably by Malguk#1:1991 and Heavenly#1:2002) on the Project Icewine acreage, proving the presence of oil saturated sandstones coincident with many of the mapped prospects, which consequently are regarded as discoveries in their own right.
Reservoir quality had been deemed a key risk factor, particularly in the deeper Seabee and Torok formations, due to depth of burial and compaction. However, based on the regional Brookian porosity / permeability trend and results from petrophysical analysis, potential for productive reservoir has been identified in both the Schrader and Torok sequence at Icewine. For example, the Middle Stellar discovery in the Torok at Icewine has average permeability ranging from 6-30md (based on 18.3% porosity) and up to 180md (based on 21.8% porosity). By comparison, the 2016 Tinmiaq#2 well has an average permeability of 11mD and average porosity of 17% (based on core data). Tinmiaq#2 was fracced with ~50,000lbs of proppant in a vertical well and flowed at 3,220 barrels of oil per day.
Previously, mapping had been undertaken utilising a conservative "slab" approach, which calculates volume based on areal extent using amplitude response combined with an estimate of average reservoir thickness. The post inversion product has allowed mapping in a more robust fashion, identifying the discrete geobodies with more favourable reservoir characteristics and improved net to gross in three dimensions.
"The evolution of the conventional portfolio continues to result in positive revisions to the already large potential identified. Additionally, the dataset is becoming more robust with each completed phase of processing and interpretation, which bodes well for the ongoing farm-out process.
Increased potential has been quantified in the two primary target zones: the Schrader, which contains a shallow topset play similar to that in which most of the recent large discoveries have been made on the
Fig. 1 Updated Resource Table (Project Icewine Conventional Potential Only)
PROJECT ICEWINE CONVENTIONAL PORTFOLIO |
|||||||
Prospective Oil Resource MMBO (Unrisked) |
|||||||
Prospects and Leads |
|
||||||
Horizon / Play |
Low |
Best |
High |
Gross Mean |
Net Mean to 88E |
||
WESTERN PLAY FAIRWAY: |
|
||||||
Victor Prospect (stacked) |
Schrader / Topset |
196 |
313 |
477 |
328 |
254 |
|
Indigo Discovery |
Schrader / Topset |
225 |
358 |
543 |
374 |
290 |
|
Charlie Prospect |
Schrader / Topset |
126 |
201 |
304 |
210 |
163 |
|
Bravo Prospect |
Seabee / Fan |
57 |
138 |
292 |
160 |
124 |
|
Mike Prospect |
Seabee / Fan |
9 |
26 |
56 |
30 |
23 |
|
Rose Prospect |
Seabee / Fan |
7 |
21 |
44 |
24 |
19 |
|
Lima Discovery/ Prospect (stacked) |
Seabee / Apron Fan |
105 |
323 |
713 |
376 |
334 |
|
Heavenly Discovery |
Torok / Apron Fan |
23 |
62 |
120 |
68 |
58 |
|
Whiskey Prospect (stacked) |
Torok Apron |
62 |
112 |
192 |
118 |
101 |
|
Stellar Prospect/Discovery (stacked) |
Torok / Fan, Channel |
320 |
604 |
999 |
639 |
500 |
|
Y Lead |
Schrader / Topset |
24 |
41.2 |
67 |
44 |
34 |
|
Z Lead |
Schrader / Topset |
11 |
27 |
53 |
29 |
22 |
|
WESTERN PLAY FAIRWAY TOTAL: |
2,400 |
1,922 |
|||||
CENTRAL PLAY FAIRWAY: |
|
||||||
|
Canning / Fan |
60 |
138 |
293 |
162 |
121 |
|
Golf Lead |
Canning / Fan |
106 |
193 |
339 |
211 |
72 |
|
CENTRAL PLAY FAIRWAY TOTAL: |
373 |
193 |
|||||
EASTERN PLAY FAIRWAY: |
|
||||||
|
Canning / Submrn Fan |
19 |
71 |
263 |
118 |
91 |
|
|
Kuparuk / Kemik Sands |
2 |
3 |
5 |
4 |
3 |
|
|
Kuparuk / Kemik Sands |
1 |
2 |
3 |
2 |
2 |
|
EASTERN PLAY FAIRWAY TOTAL: |
124 |
96 |
|||||
TOTAL PROSPECTIVE OIL RESOURCE MMBO (Mean Unrisked) |
2,896 |
2,211 |
Prospective Resources classified in accordance with SPE-PRMS as at 22nd
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.
Fig. 2 Representative Example - Middle Stellar Discovery (Torok Formation - Albian Age)
Middle Stellar - Oil Discovery |
|
Prospective Resource: (unrisked mean) |
292 MMBO (226 MMBO net to 88E) |
Trap: |
Stratigraphic/ structural, updip pinchout |
Formation: |
Brookian: Mid Torok Formation |
Depositional model: |
Distributary channel feeding a submarine fan system downslope via a canyon on the slope to the NW |
Structural Crest: |
9200 ft TVDss |
Source: |
HRZ shale: light and sweet, 35 - 37 deg API oil, underlies Torok Formation prospects which downlap onto source |
Seal: |
Lateral facies change, pinch-out to North |
Volumetrics: |
Volumetrics have been calculated using the defined VpVs geobody areal extent and thickness. P50 GRV defined by the oil-down-to in Malguk-1 at c. 10,200ft TVDss |
Reservoir Interval: |
Reservoir parameters are based on the petrophysical evaluation of the sands in Malguk-1. Porosity range 14.7 - 21.8%; Mean porosity 18.3%, net pay 86ft. Gross porous interval >200ft thick |
Reservoir/ Shows: |
The Mid Stellar sandstones are oil-bearing at Malguk-1 - good hydrocarbon shows Sands typically fine - very fine, occasionally medium grained |
NOTES: · Good stacked potential for an exploration / appraisal well · Further upside - fan lobes outside of the incised channel not included in current resource estimate · Sands deposited during lowstand event resulting in potential for optimal reservoir characteristics · Potential for preservation of porosity / permeability via early hydrocarbon charge and secondary porosity development · Located in recently upgraded area for 'yet to be discovered' oil potential ( |
A pdf version of this announcement can be accessed at the following link -
http://www.rns-pdf.londonstockexchange.com/rns/8237E_1-2018-10-22.pdf
This document contains the following additional graphics:
· Figure 3: Middle Stellar geobody - channel feature mapped post inversion
· Figure 4: Permeability / Porosity trend showing favourable comparison at Middle Stellar
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88 Energy Alaska North Slope Assets Overview
Project Icewine
In
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.
Significant conventional prospectivity has been identified on recently acquired 2D and 3D seismic across the project acreage where 2.2 billion barrels of oil potential has been delineated (net mean prospective resource). A farm-out process is currently underway, with a deal targeted prior to 2018 year end.
The HRZ liquids-rich resource play was successfully evaluated based on core obtained in the Icewine#1 exploration well (
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
Yukon Gold
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 14,194 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.
Western Blocks
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