Sponsored

88 Energy (ASX:88E) expands its territory across the Project Peregrine

Summary

  • 88 Energy (ASX:88E) has inked a deal to acquire a 50% working interest in Project Peregrine.
  • The agreement also intends to continue the exploration program at the Project Peregrine in the coming winter.
  • The acquisition is expected to open substantial potential for the Company to capture value in the region.

Oil and gas explorer 88 Energy Limited (ASX:88E) has exploration permits in Alaska and has been focusing on its Project Peregrine situated on the North Slope of Alaska. 88E has been focusing on its Project Icewine and has recently undertaken an exploration program at Project Peregrine.

PREVIOUS UPDATE: 88 Energy (ASX:88E) aims for further work on the back of encouraging evidence of Oil

Acquisition of the interest in Project Peregrine

Lately, 88E has inked an agreement with Alaska Peregrine Development Company, LLC (APDC) to support the continuation of the exploration program at Project Peregrine in the coming winter.

Project Peregrine and Recent Nanushuk Discoveries (Source: 88E Announcement 07/06/2021)

As per the agreement, 88E the acquisition of the 50% working interest from APDC in the Project Peregrine entails the consideration detailed below:

Source: 88E Announcement 07/06/2021

DID YOU READ: Encouraging results propelling 88 Energy’s (ASX:88E) advancement across project portfolio

Rationale behind the acquisition

88E and APDC conducted a detailed engagement with each other about the proposed future program at Project Peregrine.

Subsequently, both parties had agreed that the greatest value for them could be achieved through the acquisition of APDC’s interest in the project by 88E.

Several reasons include the following:

Source: 88E Announcement 07/06/2021

Notably, APDC shall remain liable for all outstanding cash calls associated with the Merlin-1 and shall have provided a total of US$20 million for the project at finalisation. Moreover, Umiat Oil Field is not included in the agreement.

MARCH QUARTER UPDATE: 88 Energy (ASX:88E) registers all-round progress across portfolio in March quarter

Recent results from exploration program

Recently, the Company has been spinning the drill at the Merlin-1 well, with drilling now finalised and interpretation of results progressing. The encouraging results received at Merlin-1 have indicated the following:

  • Moderate to excellent reservoir quality in multiple sand packages
  • Good free fluid observed on NMR
  • Thicker Nanushuk formation and more prograding/aggrading sequences than seen further north
  • Additional targets identified
  • Extensive shows throughout the well
  • RDT hydrocarbon evidence when pressure reduced

Source: 88E Announcement 07/06/2021

INTERESTING READ: Presence of oil confirmed for 88 Energy (ASX:88E), presence of oil confirmed at Merlin-1  

Significance of the acquisition

Subsequent to the finalisation of the acquisition, 88E now holds full working interest in Project Peregrine, located in the NPR-A region of the North Slope of Alaska.

88E believes that this acquisition is an excellent result for the shareholders as the Company now has complete control over the project. Furthermore, there lies the potential of additional farm-out to a new partner with better technical and operational ability in advance of upcoming proposed drilling and exploration activity.

Besides this, APDC believes that it is unlikely to be able to meet the expected funding requirements for operations in the upcoming seasons and believes it to be prudent to allow 88E to consolidate its interest in the Project to facilitate the project to move ahead.

DID YOU READ: 88 Energy (ASX:88E) Shares Surge After Securing Permit to Drill Merlin-1, Spud Expected in Current Month

The 88E stock is trading at AU$0.021 on 7 June 2021 (AEST: 1:12 pm).  

Comment


Disclaimer

Ad

GET A FREE STOCK REPORT


Top Penny Picks under 20 Cents to Fit Your Pocket! Get Exclusive Report on Penny Stocks For FREE Now.


   
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK