Umiat is located immediately adjacent to the southern boundary of the company’s Project Peregrine acreage. It is a historic oil discovery, dating back to 1945, in shallow Brookian (Nanushuk) sandstones.
A well, Umiat-23H, was tested by a prior operator back in 2014. It achieved a sustained rate of 200 barrels per day with a maximum rate of 800 barrels measured. The asset had 123.7mln barrels of gross proved and probable (2P) reserves, according to a 2015 assessment.
To acquire the asset, 88 Energy is issuing a 4% overriding royalty interest and assuming obligations for the abandonment of two historic well on-site, at an estimated cost of US$1mln.
"Our operational activity at Project Peregrine has provided 88E with a unique position from which to acquire the Umiat Oil Field at an opportunistic price point,” said Dave Wall, 88 Energy managing director in a statement.
“The asset has potential to add significant value for shareholders, possibly as a standalone development but certainly in the event that there is a material discovery in the imminent Project Peregrine drilling program."
It is the latest expansion deal for 88 Energy, with the company also set to pick up the Tract 29 area via the 2021 Coastal Plain Lease Sale.
The company was named as the high bidder for Tract 29 last week. This area is positioned as a 23,446 acre area adjacent to the company’s Yukon leases.