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88 Energy (ASX:88E) shares rise on the back of upbeat Umiat Oil update

Summary

  • 88 Energy has identified further upside at the Umiat oil field through additional studies undertaken along with the Merlin-1 post well testing and analysis.
  • 88E has also secured approval from the BLM to defer Umiat Year 2 Unit well commitment by 2 years.
  • 88E’s ongoing review of historical development plans has discovered possible cost savings on proposed development CAPEX.

Oil exploration and appraisal company 88 Energy Limited (ASX:88E) had been engaged in the acquisition of the Umiat Unit Leases and had received the Umiat data pack as part of the acquisition.

This data pack includes the Umiat 3D seismic data, and the Umiat 3D survey adjoins the southern point of the Project Peregrine lease blocks.

Subsequent to the announcement, the 88E stock experienced strong growth in its price. The 88E stock closed at AU$0.051, up by 15.909% on 04 August 2021. The stock is currently trading at AU$0.50, up by 2.040%, on 10 August 2021 (AEST: 11:54 am).

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Potential for bypassed pay in the footwall

The integration of the Linc/Malamute interpretation has enhanced the understanding of the Peregrine reservoir geometries to the north and has also augmented 88E’s petrophysical database with supplementary well control (Umiat-8 and Umiat-23H).

A thick section of Grandstand sands (Umiat reservoir unit) was penetrated at Merlin-1, and the Company is currently progressing with the analysis and integration of the wireline data collected over this interval with the Umiat dataset.

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Grandstand depth surfaces showing potential for bypassed pay in foot-wall (Source: 88E Announcement 04/08/21)

Notably, there is a possibility indicated for bypassed pay in the footwall of the Umiat structure through the initial pressure analysis. Only one well has penetrated the Umiat footwall, with drilling undertaken in 1952.

Moreover, the potential for further reservoir sands in the footwall of the Umiat structure is indicated through the seismic attribute analysis.

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Extension of Year 2 Unit obligations

Lately, 88E has also received notification regarding the approval of an extension to the Year 2 Unit obligations concerning the acquisition of the Umiat oil field. The notification citing approval from the Bureau of Land Management (BLM) was received by Emerald House LLC, 88E’s wholly-owned subsidiary and owner of 100% of Umiat oil field leases AA-084141 and AA-081726.

Emerald had requested an extension of 3 years to allow the Company to analyse the extensive amount of historical data secured during the acquisition of the Umiat oil field. Emerald has been granted a 24-month extension to the Year 2 Unit Obligations.

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The schedule for revised Unit Obligations is given below:

 

Source: 88E Announcement 04/08/21

This extension shall allow 88E to improve a full field development plan, comprising evaluation of potential synergies with plans related to the Project Peregrine acreage.

Besides, 88E shall also be empowered to utilise the knowledge gained through drilling the Merlin-1 well to plan an efficient operational program to boost the possibility of success at the Umiat oil field.

The Company plans to utilise the granted extension of 24 months towards the following activities:

Source: 88E Announcement 04/08/21

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

Ongoing Studies  

Lately, 88E has initiated studies to review the historical Umiat oil field development plans prepared by Linc Energy.

Umiat Oil Field location (Source: 88E Announcement 04/08/21)

Preliminary results of the internal review and studies have uncovered prospective cost savings on proposed development capital expenditure. Besides this, other possible routes to the market for crude have also been identified.

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

Moving forward, 88E continues to study the historical development plans proposed over the second half of 2021. Moreover, the Company shall also consider other development choices that can incorporate development along with the proximal Project Peregrine.

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