Correction: Plugging, not abandoning

Kay Cashman

Petroleum News

In the story, “Beaten to pulp: 88E stock down on Merlin results; investors not reading between lines?” in the April 11, 2021 issue of Petroleum News, Dr. Paul Craig was misquoted as saying “plugging and abandoning.”

In fact, Craig said “plugging the well.”

The story was about 88 Energy’s recent Merlin 1 exploration well in the National Petroleum Reserve-Alaska, which the company has said it might re-enter next winter to drill a sidetrack.

Merlin 1 was one of only two exploration wells drilled on the North Slope this winter - the results from both were encouraging for those on the hunt for Nanushuk formation reserves.

Per the article, Craig told Petroleum News April 6 what other experienced North Slope operatives were only willing to say off the record: Although “88 Energy stock got beaten to a pulp on the news about the Merlin 1 well, I like the results. But the market doesn’t read between the lines. Short-term investors see ‘plugging the well’ and assume it’s a dry hole with no commercial potential.”

Kevin Frank, a geologist and section chief of the state Division of Oil and Gas’ resource evaluation team, also liked the results, which he described as “encouraging.”

This comment and others made by Frank were endorsed by his boss, Division of Oil and Gas Director Tom Stokes.

Frank and others were also excited about a new Nanushuk zone that was found in the well.

“Particularly encouraging is the apparent presence of oil in a zone that has not previously been targeted in NPR-A. Whilst the potential volumetric size of this zone is not yet known - as it was not a mapped target in Merlin-1 - the formation could be extensive based on initial interpretation,” Dave Wall, 88 Energy’s outgoing managing director, said in an April 6 operations update.

- KAY CASHMAN