Sponsored

88 Energy remains optimistic despite operational issues at Merlin-1

Source: INSAGO, Shutterstock

Summary

  • 88 Energy Limited has been undertaking activities across the Merlin-1 well located at its Project Peregrine.
  • The Company has identified several potential pay zones in Merlin-1 through initial petrophysical interpretation, one of them being a new prospective horizon.
  • The Company encountered operational issues that prevented obtaining hydrocarbon samples from two most prospective zones.
  • 88E remains encouraged for the potential at Project Peregrine and believes that the Project can provide substantial returns for shareholders.

Recently, 88 Energy Limited (ASX:88E) has been focusing on activities across the Merlin-1 well at its Project Peregrine, where the Company has already set the drill rods spinning.

88E spud the Merlin-1 well on 10 March 2021. The well has been drilled to a Total Depth of 5,267’, uncovering several prospective pay zones between depths of 3,400’ and 5,100’.

Project Peregrine and Recent Nanushuk Discoveries (Source: 88E Announcement 06/04/2021)

INTERESTING READ: 88 Energy shares zoom on the back of upbeat results from exploration activities at Merlin-1

Wireline Program at the Merlin-1 well

The Company’s initial run of the wireline program comprised a standard triple combination log with nuclear magnetic resonance designed to recognise possible reservoir and resistivity and offer a projection of the movement of the existing fluid.

Furthermore, 88E found several prospective zones that are consistent with the shows and logs secured while drilling, and the NMR tool suggested good mobility throughout many of these zones.

88E aimed at gathering samples from all these zones, as part of the second run of the program. Initial studies suggested the existence of an oil signature in the fluid followed by occurrence of slugging of hydrocarbon and water, a precursor to hydrocarbon flow from the reservoir. However, it became necessary to pull out of the hole for repairs before any sample could be obtained because of a power outage due to equipment failure.

IMPORTANT UPDATE88 Energy (ASX:88E) Completes Initial 1,512ft drilling at Merlin-1

Managing Director, David Wall commented -

Source: 88E Announcement 06/04/2021

Operational issues at the well

Subsequent to the completion of the repairs, the run back in hole came across several sticky sections that suggested poor situation of the hole. Therefore, a clean out run was executed, and the Company then undertook re-entry with the sampling tool to shift to the bottom zone for testing.

However, re-establishing good communication with the reservoir was not possible, although a similar hydrocarbon signature on the optical fingerprint sensor was observed.

88E believes that the duration for which the hole remained open, and the resultant possible formation damage might have caused this issue.

Further, the Company opted to move to the subsequent most shallow prospective zone that had indicated good oil displays as well as petrophysical attributes. Moreover, a test could not be conducted due to concerns related to the condition of wellbore as the tool was stuck, which was released later. However, the risk of reverting to that zone remained high.

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

The Company believes that the present inability to sample these two most prospective zones does not make it impossible to make a discovery. However, the company may need to conduct analysis of sidewall cores and possibly additional drilling for confirmation.

Merlin-1 – on trend to large Willow oil field (Source: Company Announcement 06/04/2021)

Presence of hydrocarbons fuelling 88E’s aspirations

According to 88E, one of the zones is believed to be a fresh potential horizon within the Nanushuk Formation, which may fall under the Project Peregrine acreage.

Moreover, another zone is inferred to be combined with a zone in the Harrier prospect and there is a need for additional work, combining the results from logging with the seismic to map the volumetric capability of these regions.

DID YOU READ: Milestone Reached! 88 Energy (ASX:88E) Begins Much Awaited Drilling at Merlin-1 Well

88E took numerous samples from the zones inferred to have a smaller potential and shall be dispatched to a lab for testing.

The Company is encouraged by the existence of hydrocarbons across these zones. However, low saturation levels do not comprise a breakthrough.

Further, 88E believes that the present time of the season does not allow it to commence flow testing activities.  

Lately, the sidewall cores in Merlin-1 well have confirmed the existence of oil that was previously indicated in cuttings through fluorescence and cut that were observed over several horizons. The Company has sent the cores to the laboratory for further analysis and looks forward to releasing a schedule of anticipated results in the coming days.

IMPORTANT UPDATE: 88 Energy (ASX:88E) Continues Mobilisation of Drill Rig Despite Weather Hitches

The 88E stock last traded at AUD0.026 at 01:16 PM AEST on 12 April 2021, with an AUD338.09 million market capitalisation.


Disclaimer
The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (Kalkine Media, we or us), ACN 629 651 672 and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.
   
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