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Surface casing installed at 88 Energy’s Merlin 1 Nanushuk well
Alan Bailey for Petroleum News
88 Energy’s Merlin 1 exploration well in the National Petroleum Reserve-Alaska has reached a depth of 1,512 feet, the company announced March 22. Surface casing has been cemented in place and the blowout preventer system has been tested. Following a successful formation integrity test, All American Oilfield’s Rig 111 is now continuing to drill towards targets in the Nanushuk formation. The planned total depth for the well is 6,000 feet.
Drilling target evaluation When the well penetrates its exploration targets 88 Energy anticipates evaluating the targets over a three to five day period using a combination of logging while drilling and mud logging. That will be followed by the collection of sidewall cores and downhole samples, and three to five days of wireline logging. If the wireline logging proves encouraging, the well will be completed and a flow test carried out.
In its March 22 announcement 88 Energy also said that it is selling 360 million shares at a share price of $0.018 to ELKO International LLC, a well maintenance company based in Anchorage. ELKO is a major contractor in the drilling operation, 88 Energy said. Apparently the share price has more than doubled since mid-February.
“The endorsement of the project by ELKO as we enter the critical phase of the drilling is encouraging and will serve to fund the company’s share of the recently announced cost overruns,” said David Wall, outgoing managing director of 88 Energy.
The Peregrine project The Nanushuk target for the Merlin 1 well forms part of 88 Energy’s Peregrine exploration project, with the Merlin prospect potentially holding a gross mean oil resource of 645 million barrels. The prospect is on trend with the ConocoPhillips’ Willow Nanushuk oil discovery to the north. And the Peregrine project region lies southeast of the Harpoon Nanushuk prospect, being explored by ConocoPhillips. The Umiat oil field to the south of the Merlin 1 prospect has long been known to hold a substantial oil resource in the Nanushuk.
88 Energy plans future exploratory drilling in the Harrier prospect, to the north of the Merlin project, in the Peregrine project area. Harrier, interpreted as lying in the same rock sequence boundaries as ConocoPhillips’ Harpoon prospect, has potential oil resources in the Nanushuk formation and in the deeper Torok formation.
88 Energy obtained its Peregrine lease acreage in 2020 as a consequence of an off-market takeover of XCD Energy. Alaska Peregrine Development LLC has farmed in for a 50% ownership of the Peregrine acreage by contributing $11.3 million of the anticipated $12.6 million cost of the Merlin 1 well.
Drilling delay Following the drilling of the Merlin 1 well, 88 Energy had planned to drill a Harrier 1 well into the Harrier Nanushuk target this winter. However, the drilling of the Harrier well this winter now seems unlikely, following drilling delays as a consequence of a President Biden executive order, the company has said.
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