88 Energy to wrap-up Charlie-1 testing due to “mixed” results

88 Energy Ltd (LON:88E) (ASX:88E) told investors that it has proved movable hydrocarbons in the Charlie-1 well, with sampling confirming a large condensate discovery in the Torok formation.

In a statement, however, Dave Wall, the explorers chief executive, described it as “a mixed result”.

The main Charlie target could not be tested because the formation was found to be “poorly developed” and was therefore not sampled. Oil shows previously noted in Charlie are now deemed to be residual, the company said.

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Some secondary targets were sampled for analysis, others werent successfully sampled.

Joint venture partner Premier Oil PLC (LON:PMO) has decided to withdraw from the project as the drill results did not meet their expectations.

88 Energy noted that the well costs are within the expected budget, and, as a result, the AIM-quoted firm is not expected to incur any costs – they will be covered by the farm-out deal with Premier, which committed to spend up to US$26mln.

The well is now being plugged and abandoned, rather than put in suspension to allow further analysis.

88 Energy said there were a number of operational factors in the decision, including the potential for complications due to coronavirus and it being late in the seasonal weather window.

Torok condensate

Prior to drilling, the Torok formation was of secondary interest to the explorer.

Torok hosts the lower, middle, and upper Stellar targets – hydrocarbons were captured from the middle and lower, whilst the upper could not be sampled as this was a sub-optimal location for the target.

Further analysis will be required to determine whether a discovery of this nature can be commercialised on the North Slope of Alaska, given the likely high gas content.

Another target, Indigo, was found to be water-bearing.

Meanwhile, sampling was attempted but could not be undertaken in the better of two Lima targets in this location.

88 Energy noted that a number of the secondary targets were not optimally intersected in the Charlie-1 location and there remains potential for higher quality reservoir elsewhere in the project area.

For example, analysis has indicated that hydrocarbons in the Seabea formation (the Lima targets) appear to be heavier thanRead More – Source