London-listed 88 Energy (AIM:88E) reported cash reserves of A$28.1m, including joint venture partner contributions totalling $19.4m in a quarterly report for the quarter ended 31 March 2020.
The AIM and ASX-listed energy firm reiterated on Thursday that it does not expect to incur any costs from the drilling of the Charlie-1 well, which saw “mixed” results.
Whilst Premier Oil (LON:PMO) has chosen to withdraw from the project, 88E reported that Premier already deposited $23m into the joint venture bank account in accordance with the agreement and that the cost remains within the anticipated budget.
On Premier’s withdrawal, 88E's working interest will increase to 75% in Area A, including the confirmed condensate discovery in the Torok Formation.
The Charlie-1 appraisal well on Alaska's North Slope is being plugged and abandoned after multiple targets proved futile and posed challenges, however, the group also encountered condensate gas, with some remaining viable targets.
Shares in 88 Energy closed at 0.325p on Wednesday afternoon.
The group will now analyse these horizons in the Charlie well data over the coming months.
‘The HRZ remains a viable target and options to commercialise this potentially large resource continue to be pursued,’ the group said.
88E said it was also continuing talks over the Yukon leases, located near the Charlie-1 well, which contains the 86 million barrel Cascade Prospect.
The group noted that permitting was underway ahead of a possible drilling project in 2021 which will be subject to a farm-out transaction.
Meanwhile, the company has implemented prudent cost cutting measures, including salary reductions amid the current low oil price environment and uncertainties relating to COVID-19.
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