88 Energy (88E ) has 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 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.

The dual-listed explorer found success at Merlin-1 after geochemical analysis demonstrated definitive evidence of light oil, with an estimated API gravity between mid-30s to low-40s.

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. 

The explorer explained that the Merlin-2 appraisal well is planned for drilling in February 2022 to a permitted 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. 

Today, 88E said it has identified several appraisal drilling locations to the east of the Merlin-1 well, closer to the shelf break where enhanced reservoir thickness and quality are expected. 

The Merlin-2 well is independently assessed to have a geological chance of success of 56%.  

88E plans to announce the final drilling location and further details ‘in the coming months.’

Addressing shareholders this morning, Managing Director of 88 Energy, Ashley Gilbert, commented :“We are delighted to be working with Doyon for the upcoming drilling of the Merlin-2 appraisal well in early 2022. The Arctic Fox is one of the premier rigs on the North Slope and a rig which 88 Energy knows well, having utilised it in previous drilling operations.”

Gilbert added, “Permitting and planning is already underway and we look forward to providing additional details in relation to the Merlin-2 appraisal well in the coming months.”

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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