88 Energy grows Alaskan oil resources, targets year-end farm-out deal

88 Energy ASX 88E Alaskan oil resources farm-out deal
88 Energy hopes to soon close a farm-out deal to advance its conventional oil assets on Alaska's North Slope.

88 Energy (ASX: 88E) has boosted its prospective oil resources on Alaska’s North Slope with the announcement of a maiden resource at its 100%-owned Yukon leases, as it targets a farm-out deal before year-end.

The junior oil explorer today revealed a mean prospective resource for Yukon of 90 million barrels of oil. The estimate was based on 3D seismic acquired earlier in the year and comprises three sand bodies, the largest of which is the Cascade prospect, located downdip from the historical Yukon Gold oil discovery.

This upgrade follows last month’s resource increase at Project Icewine, which 88 Energy holds in joint venture with Houston-based Burgundy Xploration.

Icewine’s gross mean prospective resource now stands at 2.9 billion barrels of oil, with 2.2 billion barrels being net to 88 Energy.

Adding its joint venture interest in the Western Blocks, acquired a few months ago, the company’s conventional oil portfolio now boasts a net mean prospective oil resource of almost 2.5 billion barrels – significantly more than other ASX juniors.

Project Icewine farm-out

88 Energy’s flagship Project Icewine lies onshore Alaska’s North Slope near Prudhoe Bay – North America’s largest conventional oilfield.

Two wells have been drilled, cored and tested on the project. Evaluation is ongoing with the company now seeking a farm-out partner for the next steps.

88 Energy today confirmed the farm-out process was continuing as planned, with the aim of closing a deal before the end of the year.

“The evolution of the conventional portfolio continues to result in positive revisions to the already large potential identified,” 88 Energy managing director Dave Wall said at the time of Project Icewine’s resource upgrade.

“The dataset is becoming more robust with each completed phase of processing and interpretation, which bodes well for the ongoing farm-out process,” he added.

Western Blocks drilling

Meanwhile, the company is planning to commence drilling of the Winx prospect early next year at its newly acquired Western Blocks.

This prospect has been estimated to hold a gross mean unrisked prospective resource of 400 million barrels of oil (144 million barrels net to 88 Energy).

According to the company, two of the objectives to be tested in the well are within the Nanushuk formation and on success, would prove up an extension of the play four miles to the east of the current fairway.

Winx-1 is scheduled to spud in the 2019 first quarter.

In late July, 88 Energy announced its farm-in to the four oil leases making up the Western Blocks, along with two fellow Australian explorers.

Under the agreement, 88 Energy has taken over as operator and is earning an initial 36% working interest in the blocks.

Consortium partner Otto Energy (ASX: OEL) holds a 22.5% interest in the project while Red Emperor Resources (ASX: RMP) has acquired a 31.5% stake.

Private US company Great Bear Petroleum is retaining a 10% working interest and will be free carried through the drilling, completion and production testing of the planned well.

Danica has extensive experience writing and editing business news in the Oceanic and Southeast Asian regions. She has written across a range of industries including oil and gas, mining, energy, science and research, retail and travel. Danica has covered small and large cap companies listed on the Australian, Singapore, Hong Kong, Indian, London and Toronto exchanges.