88 Energy reports second light oil discovery in Hickory-1 well
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Kay Cashman Petroleum News
In an April 15 ASX announcement 88 Energy Limited reported dual reservoir success at the company's Hickory-1 well with a second light oil discovery at the SMD-B reservoir. Hickory-1 is in Project Phoenix on the North Slope of Alaska.
In an April 2 ASX announcement 88 Energy reported the successful flow testing of the Upper SFS reservoir in the Hickory-1 well with "multiple oil samples recovered, measuring ~40-degree API oil gravity." The USFS test produced at a peak gauge flow rate of over 70 barrels of oil per day.
The SMD-B reservoir showed little to no measurable associated gas flow (low Gas-oil-Ratio, or GOR), which validates the pre-test analysis.
Hickory-1 has now delivered two successful oil flows and three independent discoveries:
*SMD-B (April 15's result): with a peak flow rate of ~50 barrels per day of light oil measuring approximately 39 degree API oil gravity, under nitrogen lift.
*Upper SFS, or USFS, announced on April 2 with a peak flow rate of more than 70 bpd of light oil measuring approximately 40-degree API oil gravity, under natural flow.
*Both flow rates result from low volume stimulations over small 20-foot perforated intervals in a vertical well.
*Previously announced Basin Floor Fan, or BFF, gross best estimate (2c) contingent resource of 250 million barrels of oil equivalent announced on Nov. 6, 2023.
Long horizontal production wells The quality and deliverability of both SMD-B and USFS demonstrated via oil production to surface with the USFS reservoir producing under natural flow -- positively differentiated Hickory-1 from results on adjacent acreage, 88 Energy said.
In its April 15 ASX announcement the company said it anticipates that these reservoirs will be developed from long horizontal production wells "which typically produce at multiples of between 6 to 12 times higher than vertical wells."
Project Phoenix also benefits from the ability to produce concurrently from multiple reservoirs in a single development scenario, 88 Energy said April 15.
As such, the Hickory-1 flow test results "can be rightly characterized as in-line with those observed from equivalent reservoirs on adjacent acreage. Importantly, the performance of the USFS reservoir exceeded expectations, with the well flowing naturally with increasing oil cut," 88 Energy said.
Gilbert's comments "Having now successfully demonstrated light oil flow from two reservoirs at Hickory-1 in recent weeks, it is clear that this is a significant milestone in the history of 88 Energy. The USFS success represents the first time that we have successfully flowed oil to surface in Alaska -- and under natural flow -- as well as being the first time we have confirmed a light oil discovery of substantial scale in close proximity to the critical Dalton Highway and Trans-Alaskan Pipeline System infrastructure. To then achieve a second successful flow of light oil from the SMD-B reservoir, with a low gas/oil ratio, is an outstanding outcome for 88 Energy and its shareholders," Managing Director Ashley Gilbert was quoted as saying in the April 15 ASX announcement.
"The flowing of light oil from multiple reservoirs demonstrates the potential that this acreage holds for our shareholders, positioning the Company to grow and extract value from Project Phoenix via multiple potential development and commercialization pathways. These include farm-out to a strategic partner in pursuit of a carry towards a development proposition and/or accelerated, capital-lite production given the highly development-friendly location of Hickory-1. ... Development of these reservoirs is anticipated to be via long horizontal production wells, with numerous production analogues elsewhere demonstrating many multiple times the flow rates achieved from vertical wells," Gilbert said.
Detailed evaluation of these development options, and pursuit of the "optimal pathway, is the process that we are now set to undertake over the coming months. This work will be undertaken alongside the assessment of independent Contingent Resource declarations for the SFS and SMD reservoirs at Hickory-1, which will be additive to the BFF Contingent Resource previously declared. It is a busy and exciting time ahead for 88 Energy," Gilbert said.
--Kay Cashman
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