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APDC buys into Project Peregrine, All American Rig 111 drilling 2 wells
Kay Cashman Petroleum News
On Dec. 4, 88 Energy Ltd. said it has finalized a farm-out agreement with Alaska Peregrine Development Company LLC, or APDC, on its 100% owned Project Peregrine in the National Petroleum Reserve-Alaska. The acreage was acquired by 88 Energy in July in an off‐market takeover of XCD Energy.
On Nov. 9, the Perth-based ASX and AIM listed independent had said planning and permitting for the first well of two wells in its North Slope Project Peregrine remained on schedule for a February spud. 88 Energy also said that day that a preferred bidder had been selected for the Peregrine farm-out on one well, although the name of the successful bidder and details of their deal wouldn’t be made public until the farm-out paperwork was finalized.
As it turns out, APDC is farming in for a 50% ownership of the 195,000-acre Peregrine Project by contributing US$11.3 million towards the cost of one of the two wells planned for this winter, the Merlin 1 (estimated gross cost US$12.6 million).
In the Dec. 4 announcement from 88 Energy’s board of directors, APDC was identified as “a special purpose investment vehicle organized for Project Peregrine,” its members “a consortium of private US entities managed by individuals that have extensive experience in oil and gas, including owning businesses that directly operate in the sector.”
“Being able to secure a farm-out deal with a high caliber partner on close to two for one deal terms in the current oil and gas environment is a major coup for our shareholders,” 88 Energy Managing Director Dave Wall said.
“APDC is a close cultural fit for our proposed future plans for Project Peregrine. … We look forward to potential success as we approach the imminent spud of Merlin 1 in February 2021,” he said.
Rig 111 under contract On Dec. 7, 88 Energy announced it executed a rig contract with All American Oilfield LLC for the use of Rig 111 to drill the two Project Peregrine wells, Merlin 1 and Harrier 1. Both North Slope NPR-A wells will be drilled to a depth of approximately 6,000 feet in order to intersect the prospective Nanushuk topset horizons on trend to discoveries to the north of the project area.
The wells will be drilled by 88 Energy operating subsidiary Accumulate Energy Alaska, which is run by long-time North Slope geologist Erik Opstad.
Targeting Nanushuk reservoir The main target of the wells is the prolific Nanushuk reservoir.
Merlin 1 is considered a direct analogy to ConocoPhillips’ Willow oil discovery, while ConocoPhillips’ Harpoon prospect is interpreted to lie on the same sequence boundaries as Harrier 1.
The prospects lie between the Umiat oil field to the south and Willow and Harpoon to the north.
Opstad told Petroleum News that the Nanushuk can be reached at less than 5,000 feet in the area, while a third prospect in the Peregrine block, Harrier Deep, has a Torok objective at about 10,000 feet. It will not be drilled in the 2020-21 winter season.
Dropping some Icewine acreage As part of its annual review of leases, 88 Energy said Dec. 7 that the Icewine joint venture has “determined that several leases at Project Icewine are no longer considered prospective and, consequently, a decision has been made to not renew these leases.”
The leases represent approximately 25% of the gross lease position, resulting in a 231,000 net acreage position for 88E in the Central North Slope, the company said, reducing the “ongoing rental costs at the project as focus shifts to the farm-out effort in the vicinity of the recently drilled Charlie-1 well.”
“In a new development, Pantheon Resources announced that its Talitha-A well, located close to the northern border of the 88E central acreage position, is scheduled to spud in January 2021. Several of the prospective horizons in Talitha-A are interpreted to extend into 88E acreage,” 88 Energy said.
- KAY CASHMAN
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