88 Energy to Drill Second Alaska North Slope Appraisal Well

88 Energy Ltd. has confirmed that its permit to drill (PTD) has been approved by the Bureau of Land Management on Feb. 10 for the Merlin-2 appraisal well, located in Project Peregrine in the NPR-A region of the North Slope of Alaska.

Commissioning of the Arctic Fox rig has been completed, with mobilization to the Merlin-2 drilling location commencing. Pioneering of the single lane snow road to the Merlin-2 location has also been completed.

The Merlin-2 well is now scheduled to spud in early March 2022 with drilling expected to take approximately 3 to 4 weeks, including wireline logging.

“Following a period of review we are pleased to have the PTD in hand, and the mobilization of the Arctic Fox rig commencing to the drilling location ahead of spud in early March 2022. We look forward with excitement to the drilling of the highly anticipated Merlin-2 appraisal well,” 88 Energy’s managing director, Ashley Gilbert, said.

The Merlin-2 appraisal well is planned for a total depth of 8,000 ft, 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 (drilled in March 2021 to a depth of 5,267 ft). Merlin-1 demonstrated the presence of oil in these multiple stacked sequences within the Brookian Nanushuk Formation.

Project Peregrine

Project Peregrine is located in the NPR-A region of the North Slope of Alaska and encompasses approximately 195,000 contiguous acres. It is situated on trend to recent discoveries in a newly successful play type in topset sands in the Nanushuk formation. 88 Energy has a 100% working interest in the project.

The Merlin-1 well was spudded in March 2021 with drilling operations completed in April 2021.

Interpretation of results was completed in August 2021 with post-well evaluation successfully demonstrating the presence of oil in N20, N19 and N18 targets, with 41 ft of net log pay across the three reservoir intervals noted and geochemical analysis determining the oil to have an estimated API gravity between mid-30 to low-40 API (light oil).

A second well, the Merlin-2 appraisal well, is planned to be drilled in first-quarter 2022 as a follow-up well to the Merlin-1 exploration well. Merlin-2 is targeting a net entitlement mean prospective resource of 652 million barrels (unrisked).

Independent oil and gas reservoir evaluation consultancy, ERCE Australia Pty Ltd (ERCE), conducted an updated assessment of the Project Peregrine prospective resources post the Merlin-1 well results. The updated prospective resource estimates and risking assessments for Project Peregrine are noted below.