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88 Energy (ASX:88E) to get drill rods spinning at Merlin-2 well in 2022

Highlights 

  • A zero-debt company, 88 Energy is backed by a world-class portfolio of Alaskan acreage and a technically and commercially strong team.
  • The Company plans to drill the Merlin-2 appraisal well to target 652 million barrels of oil.
  • The Merlin-2 well will be drilled under the Project Peregrine, located on the North Slope of Alaska.
  • The Company holds a combined portfolio of 3.4Bboe with 2P reserves of 94Mbbl of oil.

Oil & gas company 88 Energy Limited (ASX:88E) is focused on unlocking value from its world-class asset portfolio on the North Slope of Alaska, a well-established, prolific oil province. The Company’s journey continues to progress towards a discovery across its wholly owned Project Peregrine acreage.

In what comes as a major headway, the Company is all set to drill the Merlin-2 appraisal well in the first quarter of 2022. The well is expected to unlock an aggregate mean prospective resource of 652 million barrels (Mbbl) of oil with a geological chance of success of 56% across the 3 primary Nanushuk targets.

Latest update: 88 Energy (ASX:88E) finalises Merlin-2 appraisal well location

Merlin-2 offers significant potential upside

The appraisal well is being considered one of the largest exploration/appraisal opportunities to be drilled in 2022, globally.

The petroleum system at Project Peregrine was proven by the results established by the Merlin-1 well, drilled back in Q1 of 2021. The Merlin-1 drilling campaign outcomes have indicated the presence of hydrocarbons in all three primary targets of Merlin-2.

The location of the Merlin-2 well relative to Merlin -1 is East and downdip, targeting a higher energy reservoir succession. The location is expected to provide thicker reservoirs   as well as higher permeability and porosity sands.

88 Energy, 88E, drilling rig

Image source: Company update, 30 November 2021

88E has planned a production test program for Merlin-2. The test program is contingent upon the wireline program results, in particular the modular formation dynamic test (MDT). The program and duration of the test will be subject to funding and weather conditions prevailing at the time of testing.

Related read: What made 88 Energy stock swell up by ~250% over the past year?

Project Peregrine with multiple large drill-ready prospects

The Project Peregrine covers an area of 195,373 acres with multiple large drill-ready prospects.

The Merlin-1 well established the prospectivity of the project and highlighted the presence of oil in multiple stacked targets. The project area has three independent reservoir targets- N20, N19 and N18.

The project boasts a proven petroleum system with 652MMBO mean unrisked net entitlement to the Company via the Merlin-2. The mean risked net entitlement includes 364MMBO.

Meanwhile, Peregrine has a relatively higher geological success chance of nearly 56%.

88 Energy, 88E, Map

88 Energy acreage map (Image source: Company update, 30 November 2021)

Related read: 88 Energy (ASX:88E) executes rig contract for Merlin-2 appraisal well in Feb 2022

88 Energy delivering exceptional opportunities

88 Energy is a zero-debt company with strong and experienced Board sailing the Company on a high-growth path. The Company is advancing on all projects across the North Slope asset portfolio.

88E is well-funded to carry out its exploration and development activities with net cash of AU$36 million at the end of the September quarter.

Related read: 88 Energy (ASX:88E) bolsters financial stance to expedite activities across exploration assets

88E shares traded at AU$0.026 on 3 December 2021.

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