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88 Energy: Analysis underway as Icewine-2 hiatus continues

Published: 02:24 18 Jul 2017 EDT

onshore drilling operation
Imbibition began on July 10

As 88 Energy Ltd’s (LON:88E,ASX:88E) Icewine-2 well programme is undergoing a six-week hiatus, the explorer is now undertaking an analysis to determine what the findings-to-date mean for the chance of success in the HRZ shale play.

Icewine-2 was suspended on July 10 for a period of six weeks for imbibition (or soaking), a process intended to increase pressure in the well and improve the rate of frack fluid flow back.

READ: 88 Energy shares drop in London as explorer calls time-out for Alaska well

Previously, the company was only able to recover around 16% of the fluid it injected into the Icewine-2 well and only trace hydrocarbons have been seen at surface. Normally, the flow back of frack fluid precedes the flow of hydrocarbons, and the hiatus in the Icewine-2 well means the intended flow testing programme is at the very least delayed.

If imbibition does not produce the desired effect the company intends to carry out an artificial lift (or swabbing) process.

88 Energy shares slumped last week after it announced the imbibition plan, which as well as delaying testing raised uncertainties about the viability of the HRZ shale – albeit the company said imbibition is not an entirely uncommon requirement for new shale projects.

On Tuesday, the company highlighted to investors that there is no blueprint or benchmark against which it is meaningful to measure the well’s performance to date. It noted that the HRZ has several similar characteristics as other successful shales but it also displays many differences too.

Analysis is now underway to determine what impact the performance of the well to date has on the play’s probability of success.

This will involve comparison of the flowback rate against expected the expected flowback rate based on reservoir parameters and the successful execution of the fracture stimulation, the company explained.

It will also reconcile the petrophysical model, and the apparent in-situ hydrocarbons, with the hydrocarbons recovered to surface to date.

88 Energy told investors that the analysis is ongoing and the findings will be communicated once complete.

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