88 Energy (ASX: 88E) expects to seal a farm-out deal for its flagship Project Icewine on Alaska’s North Slope in the first quarter of 2019 after interested parties requested a deadline extension.
The company had initially planned to close the farm-out process before the end of the year.
However, in an operations update today, 88 Energy said it decided to honour requests for an extension to the year-end deadline in order to maximise the number of bid ready parties.
The extension will also enable 88 Energy to remain within the logistical schedule required for the drilling of multiple wells in the 2020 operating season.
88 Energy managing director Dave Wall said the level of interest and the quality of parties in the Project Icewine conventional farm-out data room remained highly encouraging.
“By shifting the self-imposed year-end deadline for the Icewine conventional farm-out, we are maximising the chances of achieving the best deal possible for our shareholders,” he said.
Project Icewine, which is held in joint venture with Houston-based Burgundy Xploration, is located near Prudhoe Bay – North America’s largest conventional oilfield.
Icewine’s gross mean prospective resource stands at 2.9 billion barrels of oil, with 2.2 billion barrels being net to 88 Energy.
HRZ shale to remain a key focus
Unlocking the HRZ shale, located within Project Icewine, remains a top priority for 88 Energy.
Baker Hughes is currently undertaking a comprehensive, ground-floor peer review of data and analysis relating to the HRZ shale.
The analysis included the pre-drilling work completed by Burgundy Xploration as well as data obtained from the Icewine-1 and Icewine-2 wells.
With the initial review complete, Baker Hughes has recommended several new state-of-the-art lab tests to augment the current body of work.
Current work is expected to be completed in the first-half of 2019, ahead of commencing farm-out proceedings.
At 88 Energy’s other assets, 3D seismic processing work is continuing at the Yukon leases while the first spud for the Winx-1 exploration is on track for next February.
Wall said the company was looking forward to a prosperous 2019, flagging a busy first quarter for the junior explorer.
“The first quarter of 2019 is shaping up to be an important period for the company with results expected from ongoing analysis related to the HRZ shale, the drilling of the Winx-1 exploration well, further definition of the potential on the Yukon leases and, of course, the Project Icewine conventional farm-out,” he said.
88 Energy shares jumped 6.7% to $0.016 at mid afternoon trade.