88 Energy Limited (LON:88E, ASX:88E) shares jumped higher on Friday as the firm reported the findings of final petrophysical analysis of the Charlie-1 well exploration, revealing greater hydrocarbon pay than previously estimated.
According to 88 Energy, the well’s net pay is significantly increased by the additional work and the largest additional contribution was in the Lima discoveries which are in the Seabee formation. The new analysis follows Premier Oil’s exit from the venture.
The Upper Lima section is now estimated to have some 250 feet of net pay, versus initial estimates of just 8 feet, whilst the Lower Lima section is now seen to span 111 feet of net pay compared to the earlier estimate of 64 feet.
The work confirms both Lima sections as large oil discoveries, 88 Energy said. It noted that the new findings are particularly encouraging because the Seabee formation is the most extensive conventional horizon across the Project Icewine acreage, and, targets are typically shallow compared to Torok.
"The results from the Seabee, despite Charlie-1 not being optimally located, are outstanding,” said Dave Wall, 88 Energy managing director in a statement.
“Whilst these may appear as a serendipitous by-product of the well, internal analysis prior to drilling had already significantly high graded this formation; however, it was too late to change the objectives/location of the well, meaning that work remained largely on the drawing board. This final interpretation is a strong vindication of that internal effort.”
Friday’s statement also noted that the Stellar targets, in the Torok formation, which were the original target for Charlie-1 are confirmed as hydrocarbon discoveries with good liquid hydrocarbon content. Though some uncertainties remain regarding the gas to oil ratio, and the company noted that more liquid hydrocarbons may be unlocked by reservoir stimulation.
An additional formation, the Kuparuk, remains prospective the company added.
Wall noted that desktop work will continue for the Seabee discoveries, with upcoming work aimed at producing volumetric estimates of the discoveries. A new farm-out process to bring in fresh exploration partners will also follow.
He also updated on progress since the merger with Alaska peer XCD Energy.
“Good progress continues to be made at the newly acquired Project Peregrine on both the farm-out and permitting/planning fronts. Additional news related to that will be provided to the market in a separate announcement in the near term.”
Elsewhere, in the shale portion of Project Icewine, technical work has confirmed the ideal thermal maturity for the HRZ shale. Wall added that this is encouraging and will form the basis of further work which continues the effort to unlock the asset’s large potential.
In early trade on Friday, 88 Energy shares topped the London gainer's board, up 31% at 0.38p.
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