88 Energy advances Icewine project
Independent raises $17 million for Alaska North Slope exploration, appraisal drilling, well testing south of Prudhoe Bay
A May 21 operations update from 88 Energy Ltd. said the company, which has two exploration wells planned for the North Slope, will resume testing its Icewine No. 2 well on June 11. The company’s operating arm in Alaska is Accumulate Energy Alaska, headed by Erik Opstad.
88 Energy (ASX, AIM) recently raised A$17 million to fund its Alaska exploration program, a placing that was “significantly oversubscribed,” the West Perth, Australia-based company said.
Icewine No. 2 was drilled in 2017, and testing began in August but was suspended Sept. 18 for the winter. According to paperwork filed last year with the state Division of Oil and Gas, the company might drill a follow-up lateral with multistage stimulation, which 88 Energy said would be “contingent upon outcome of final flow testing.”
Site work (clearing snow and ice) has already started at the Franklin Bluffs gravel pad from which Icewine No. 2 was drilled off the Dalton Highway. “Final preparations” for mobilization of test equipment are underway, 88 Energy said.
The firm holds and is operator of some 475,000 contiguous acres (301,000 acres net) in its Icewine leases, which are along a year-round access road about 35 miles south of Pump Station 1 where Prudhoe Bay feeds into the trans-Alaska oil pipeline.
88 Energy also holds and operates the Yukon Gold prospect, south of the Point Thomson field and west of the Arctic National Wildlife Refuge.
Nitrogen lift unitsOnce site work has been completed at Icewine, pressure gauges will be retrieved from downhole and data analyzed to determine if there is any reservoir degradation, which “may require remedial action such as re-perforation of the target intervals,” 88 Energy said.
Concurrently, test equipment including separators, tanks and nitrogen lift units will be moved to the site “ahead of the scheduled commencement of flow testing on the 11th June 2018.”
The flow testing program has been designed to utilize nitrogen lift to assist the removal of up to an additional 4,000 barrels of fluid from the HRZ reservoir.”
88 Energy said it anticipates this will “enable the hydrocarbons in the reservoir to flow naturally to surface at a representative rate. Based on modelling of the reservoir pressure and fracture conductivity,” this will take 10-14 days. The well “will then continue to be flowed back to ascertain drawdown pressure and decline rate.”
Two exploration wells part of planThe company filed a lease plan of operations with the Alaska Division of Oil and Gas in 2017 to drill two exploration wells, Bravo No. 1 and Charlie No. 1 in the Icewine project.
The Icewine No. 1 and No. 2 wells were drilled from the Franklin Bluff gravel pad, but the new wells will be off-road, from ice roads west of Franklin Bluff, although where they will be located will likely depend on recent seismic survey results.
In its plan of operations, 88 Energy Alaska’s operating company, Accumulate, said drilling objectives for the wells include testing and evaluating the Seabee formation, a target found in surrounding exploration wells and in production at the Meltwater pool in the Kuparuk River unit.
Seismic on schedule88 Energy also reported May 21 that its 3-D seismic processing is on schedule, referring to two 3-D seismic surveys it completed this past winter. One, the Icewine survey, to the west of the Dalton Highway, was designed to confirm leads identified in existing 2-D seismic on the western margin of the acreage. The second survey was on the company’s Yukon Gold tracts.
Early products from the Project Icewine 3-D survey are expected to be received mid-year prior to starting the formal farm-out process “related to the conventional prospectivity already identified over the Western Margin leases at the project,” 88 Energy said.
The Yukon Gold 3-D data is expected in fourth quarter and “will assist in assessment of the potential of the Yukon Gold oil discovery as well as delineation of any additional potential on the leases.”
Yukon Gold history88 Energy’s Yukon Gold acreage south of Point Thomson and west of ANWR was acquired in the state’s late 2017 North Slope areawide lease sale by 88 Energy subsidiary Regenerate Alaska Inc. and included the existing Yukon Gold well.
Drilled by BP in 1993-94, the well was an oil discovery that the state estimated contained recoverable reserves of some 120 million barrels.
The state approved an SAExploration application for the Yukon 3-D in February. The permit said the project included some 251 square miles of 3-D acquisition.
Icewine project historyIn November 2014, 88 Energy entered into a binding agreement with Burgundy Xploration to acquire a working interest (87.5 percent, reducing to 77.5 percent on spud of the first well on the project) in a large acreage position on a multiple objective, liquids-rich exploration opportunity onshore Alaska.
The Icewine project is on an all-year operational access road with both conventional and unconventional oil potential. The primary term for the state leases is 10 years with no mandatory relinquishment and a 16.5 percent royalty.
The HRZ liquids-rich play (Brookian sequence) has been successfully evaluated based on core obtained in the Icewine No. 1 exploration well (completed in 2015), marking the completion of Phase I of Project Icewine, per 88 Energy.
Phase II began with drilling the follow-up appraisal well, Icewine No. 2 in second quarter 2017.
Large conventional prospectivity was identified on acquired 2-D seismic across the project acreage.
Recouping of exploration incentives promised by the state of Alaska with up to 35 percent of net operating loss refundable in cash are expected to be more than $20 million, per Petroleum News sources.
The Brookian conventional play is proven on the North Slope, with recent multiple Armstrong/Repsol and ConocoPhillips oil discoveries totaling several billion barrels recoverable.
Additional conventional potential exists in the in the Icewine project’s Brookian delta topset play, deeper Kuparuk sands and the Ivishak formation, 88 Energy has reported.