88 Energy completes XCD buy; two exploration wells this winter

Kay Cashman

Petroleum News

On Aug. 17, 88 Energy Ltd. reported it has completed its acquisition of all the outstanding ordinary shares and listed options in XCD Energy Ltd., per the compulsory acquisition process announced on July 9. 88 Energy now owns 100% of the share capital of XCD.

Both companies have been focused on their Alaska North Slope prospects, all of which are undeveloped.

This coming winter 88 Energy subsidiary Accumulate Energy Alaska is planning to drill two Nanushuk prospects that it acquired as part of its off‐market takeover of XCD. The Harrier and Merlin prospects are in the 195,000-acre Peregrine block in the National Petroleum Reserve-Alaska (see map in print and pdf versions of this story).

On Jan. 21, then XCD managing director Dougal Ferguson told Petroleum News that ConocoPhillips’ Willow oil discovery is considered a direct analogy to Merlin while ConocoPhillips’ Harpoon prospect “is interpreted to lie on the same sequence boundaries as the Harrier prospect,” between the Umiat oil field to the south and Willow and Harpoon to the north.”

In a July 13 interview, Erik Opstad, general manager operations for Accumulate, said the Harrier 1 and Merlin 1 exploration wells will be drilled into the shallow Nanushuk reservoir using a lightweight workover rig that can be transported off-road in pieces by tundra-safe track vehicles, versus a heavier rotary rig which would require an ice road.

The company will use existing gravel roads and snow trails to conduct the entire exploration program.

The Nanushuk formation requires drilling to only about 5,000 feet to fully test, whereas a third prospect in the Peregrine block, Harrier Deep, has a Torok objective at about 10,000 feet. It will not be drilled this coming winter.

XCD has said the three onshore prospects hold a mean unrisked recoverable prospective resource of 1.6 billion barrels of oil, per an independent report generated by ERC Equipoise. (Harrier Deep estimated at 572 million barrels.)

- KAY CASHMAN