New North Slope player; 88E snags Premier for Icewine JV

Kay Cashman

Petroleum News

Independent 88 Energy Ltd. said Aug. 22 it has a new joint venture partner for its conventional Icewine project on Alaska’s North Slope. London-based independent Premier Oil (LON:PMO) signed a sale and purchase agreement with 88 Energy and Burgundy Xploration to farm-in for a 60% interest in Area A, containing the Malguk-1 discovery drilled by BP in 1991, which discovered but never tested 251 feet of light oil pay in turbidite sands in the Brookian Torok formation.

Premier will pay the full costs of an appraisal well, Charlie-1, up to a total of US$23 million to test the reservoir deliverability of the Malguk-1 discovery. The well will be drilled and tested in the first quarter of 2020.

Premier, which was founded in 1934, estimates an accumulation of more than 1 billion barrels of oil in place, based on the original well data and its evaluation of the existing 3D dataset.

On successful completion of the work program, Premier will have the option to assume operatorship.

88 Energy will retain a 30% working interest in Area A.

Should the Charlie-1 well prove successful, Premier has the option to earn a 50% working interest in Areas B or C through spending US$15 million.

Premier Oil’s recently released first half 2019 financial results showed an after tax profit of US$121 million, free cash flow of US$182 million, and worldwide production of approximately 8,400 barrels of oil equivalent per day.

“We are delighted to be partnering with a company of the technical caliber of Premier. Premier has a strong track record of delivering projects through to production and is an excellent addition to the joint venture,” Dave Wall, the managing director of 88 Energy, was quoted as saying in the company’s press release.

“The Charlie-1 well has been designed to test all of the prospective horizons identified in the Western Play Fairway, giving benefit usually only derived from a multi-well program,” Wall added.

88 Energy has previously said that Icewine’s conventional acreage contained multiple stacked plays, including a Schrader topset play and the Torok slope and basin floor fan play.

88 Energy Alaska, whose general manager of operations is Erik Opstad, is a subsidiary of Australian independent 88 Energy Ltd., a West Perth-based ASX and AIM listed firm.

More information on Premier can be found on its website at premieroil.com.