The location of 88 Energy’s (88E ) Merlin-2 well, which is planned for a depth of 8,000 feet and is targeting 652 million barrels of oil, has been selected from three initially permitted locations.
The drilling of Merlin-2, which is located at 88E’s 100% owned Project Peregrine in the NPR-A region of the North Slope of Alaska, follows the successful drilling of Merlin-1 earlier this year. Permitting and planning for Merlin-2 remains on track for scheduled spud in February 2022.
The Merlin-2 well, which is scheduled for drilling in February 2022 using the contracted Arctic Fox rig, is located east and downdip of the successful Merlin-1 well. This location is expected to encounter thicker reservoir sections and higher permeability / porosity sands, it reported.
The Alaskan-focused explorer has informed investors that the Merlin-2 appraisal well is planned for a total depth of 8,000 feet, and is targeting 652 million barrels of oil in the highly prospective N18, N19 and N20 targets that were encountered in the successful Merlin-1 well
In March 2021, the Merlin-1 well was drilled to a depth of 5,267 feet. This demonstrated the presence of oil in these multiple stacked sequences in the Brookian Nanushuk Formation.
The remaining two locations, together with the permitted Harrier-1 location, can be drilled in future as part of an extended drilling program to assess the full potential of Project Peregrine.
A production testing program for the Merlin-2 well has been designed and will be on standby during initial wellsite operations. 88E said the production test is contingent upon the wireline program results, in particular the MDT results, and government approvals. The program and length of the test will be subject to operational, funding and weather window considerations.
Last month, 88E executed a rig contract with drilling contractor Doyon Drilling Inc for the use of the Arctic Fox rig to drill the Merlin-2 appraisal well at its Project Peregrine in Alaska.
The Arctic Fox rig is a fully integrated, multi-module unit, configured in highway transportable loads for early ice road mobilization. The lightweight rig enables drill site access, allowing for maximum over-the-hole drilling, extending the winter exploratory season by as much as 50%.
The Merlin-1 well was spudded in March 2021 and targeted 645 million barrels of gross mean prospective resource. With drilling now complete, and the interpretation of the results underway, a second well, Harrier-1, targeting 417m barrels is planned to be drilled in 2022.
Following this success, the Merlin-2 appraisal well will now be designed to test the Nanushuk formation further to the east, where enhanced reservoir thickness and quality are expected.
In addition, in early August 2021, the Company released its results for 1H21 in which it stated that as at 30 June 2021 the Company had cash resources of A$14.8 million and zero debt.
88 Energy plans to utilise the next 24 months to investigate previous scoping studies and explore possible alternative development scenarios to improve the economics of Umiat.
In regard to its 100% owned Yukon Leases, the Group said it is in ‘advanced discussions’ with nearby lease owners seeking to aggregate resources into a joint development of the area.
Last month, the Company successfully closed an equity placing which raised £12.71 million with a total of 855.8 million new shares being sold to investors at a price equivalent of 1.49p.
The proceeds will support the drilling and logging of its Merlin-2 appraisal well in 1Q22. Overall, the operation is targeting 652 million barrels in the N20, N19 and N18 horizons.
The Company explained that the proceeds will also be used to fund lease acreage payments as well as enable the identification and execution of potential new project opportunities.
Following completion of the placing, 88E said it will have sufficient cash to fund its ongoing working capital requirements and general and administrative overheads for the next year.
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