88 Energy Confirms Light Oil Discovery in Alaska Asset

Australia’s 88 Energy Limited has confirmed a light oil discovery at the Hickory-1 discovery well, located in Project Phoenix on the North Slope of Alaska.

The company reported successful flow testing of the Upper SFS reservoir in its Hickory-1 well, according to an announcement Tuesday on the Australian Securities Exchange. Hickory-1 is located in state lands on the North Slope of Alaska, adjacent to the Dalton Highway and Trans Alaska Pipeline, within Alaskan Oil and Gas lease ADL392314. 88 Energy holds a 75 percent working interest in the well and is the operator. The well spudded in March 2023 and was drilled to a total depth of 10,650 feet.

The test produced a peak flow rate of over 70 barrels of oil per day (bopd). Oil cuts increased throughout the flow back period as the well cleaned up, reaching a maximum of 15 percent oil cut at the end of the flow test program, 88 Energy reported in an announcement Wednesday on the Australian Securities Exchange.

The well produced at an average oil flow rate of approximately 42 bopd during the natural flow back period, with instantaneous rates ranging from approximately 10 to 77 bopd with average rates increasing through the test period.

Multiple oil samples were recovered with measured oil gravities of between 39.9 to 41.4 API, representing a light crude oil, the company noted.

Further, 88 Energy said that some natural gas liquids (NGLs) were produced but not measured. The presence of NGLs was demonstrated by samples from the flare line and by visible black smoke in the flare.

Historically, NGL prices on the North Slope of Alaska have been similar or slightly below light oil prices and are therefore considered highly valuable, the company said, adding that further work is required to quantify the exact volume of NGLs, which 88 Energy intends to include as part of a maiden certified contingent resource assessment at Project Phoenix for the SFS reservoirs.

Preparation for the next state of the Hickory-1 flow testing schedule is underway and will focus on the proven SMD-B reservoir, 88 Energy said. Testing operations are scheduled to complete in April. The company noted that weather conditions have been particularly challenging with low temperatures and high winds experienced during operations to date.

“Outcomes from this test represent a significant milestone for 88 Energy and its shareholders, with the first successful flow of oil to surface achieved at the company’s Alaska projects”, 88 Energy Managing Director Ashley Gilbert said.

“The completion of flow testing in this zone and recovery to surface of light oil, in addition to NGLs and associated gas, confirms our understanding of the substantial potential of these reservoirs. Significantly, these flow rates were achieved from only a 20ft perforated section in a vertical well with a low volume stimulation over a short period,” Gilbert continued. “As previously highlighted, production rates in long horizontal production wells are typically multiples of 6 to 12 times higher than tested in vertical wells, as evidenced in many Lower 48 analogs".

“Importantly, the Upper SFS zone had not previously been intersected or tested at either Project Phoenix or on adjacent acreage. It is particularly exciting for us to produce oil to surface and demonstrate the producibility of this additionally discovered reservoir. Future plans for the assessment of the commerciality of Project Phoenix will be communicated post analysis of the Hickory-1 program,” he added.

“We will now proceed to undertake flow testing of the shallower SMD-B reservoir over the coming weeks. This is a zone which has previously been successfully tested on adjacent acreage to the north”, he concluded.

Australia’s 88 Energy has operator exploration interests in onshore Alaska and non-operator production interests in onshore Texas. The company has been operating on the North Slope of Alaska since 2015, successfully drilling multiple exploration wells and acquiring extensive seismic data across a large acreage position.

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