It ended the first half with US$15.01mln of cash on hand.
The Alaska-focussed explorer, which today released half-yearly results, recently endured a frustrating well programme - with the Icewine-2 coming to an end in early July after months of struggling in efforts to recover sufficient volumes of fracking fluid to enable hydrocarbons to flow.
88 Energy highlights the exercise as successful data gathering process, as any upward-looking junior explorer likely would, and, it told investors the well’s early findings were “within the range of expectations”.
Nonetheless, the outcome was not what investors had hoped for. Icewine-2 did not deliver the production data that it set out to confirm.
In 88 Energy’s words, the well did not reveal the sort of hydrocarbon flow rates that are “representative of the capability of the reservoir”.
At the time of July‘s decision to end the Icewine-2 programme, the company also told investors that it believes the results so far still support the potential economic viability of the HRZ shale play.
It remained positive that it could attract a new farm-in partner for future shale work programmes, which are now expected to be more substantial.
In explaining its decision, the company said it reckons a “more significant program” is needed to de-risk the HRZ play. A multi-stage stimulation in a horizontal well is required to achieve connectivity to the reservoir and, something it thinks the data collected so far will help it to “confidently design”.
“Ideally the Icewine-2 well would have delivered a stronger hydrocarbon flow rate and it is disappointing that this was not achieved; however, the joint venture has many positive takeaways from the well and remains confident about the potential of the HRZ play,” managing director Dave Wall said in July.
“Future evaluation of the large potential already identified is planned to be accomplished via farm-out and this process has already commenced.”
Moving on to conventional prospects
88 Energy did not dwell long on the Icewine-2 disappointment, indeed, only a few weeks later it launched new initiatives focussing on conventional exploration targets.
The two companies have executed definitive agreements with Great Bear Petroleum Ventures and Otto Energy to acquire the majority of Great Bear's working interest in the four leases comprising the Western Blocks (ADL 391718; ADL 391719; ADL 391720; ADL 391721) in exchange for drilling a commitment well on the Western Blocks prior to 30 May 2019.
That was followed by the signing of a rig contract for the drilling of the Winx prospect.
The Winx-1 well will target the Nanushuk play fairway where 3D seismic studies defined an oil prospect which has a prospective resource of 400mln barrels of oil (MMbbls).
Of that, 144MMbbls will be net to 88E and 126MMbbls net to its partner, Red Emperor. Great Bear and Otto Energy are the other partners with stakes in the project.
The geological chance of success has been estimated to be in the range of 25-30%.
“The execution of a rig contract is an important milestone for the consortium as plans progress to drill the large Winx prospect in the first quarter of 2019.”
North Slope farm-out efforts
Away from the Western Blocks, 88 Energy already had a high potential portfolio, with some 1.5bn barrels of untested, possible oil resources in conventional targets.
Alaska’s North Slope is a fully-fledged, confirmed conventional oil province - so unlike with the HRZ shale, 88 Energy doesn’t have to blaze a trail as an early mover.
Major oil firms have already unearthed world-class discoveries. At Prudhoe Bay, some 15bn barrels of crude has been produced and more recent exploration successes have found several billions more in new finds.
88 Energy has shot 3D seismic across its acreage (well, about 25% of it), and, has upgraded multiple leads into ‘drillable’ prospects. It describes them as ‘stacked prospects’ which means there’ll be opportunities to test multiple targets with individual wells.
Farm-out processes are underway (separate to the Western Block venture) with a view to supporting an exploration and appraisal programme, targeting a drill programme in the first half of 2019.