Drilling program going to plan on Alaskan North Slope

88 Energy has updated the market on the drilling progress at its Merlin-2 well at Project Peregrine on the Alaskan North Slope.

Drilling this well was our key objective that we wanted to see 88E achieve in 2022, as outlined in our 2022 88E Investment Memo.

So far, the oil and gas junior has successfully drilled the Merlin-2 surface hole to 2,005 feet. 88E anticipates that all target zones will be intersected prior to reaching the permitted Total Depth (TD) of approximately 8,000 feet, which it expects to reach in two weeks time.

The company confirmed that operations are progressing as planned with the Arctic Fox rig scheduled to commence drilling ahead to the reservoir targets imminently.

Initial indications as to the prospectivity of the target zones at the Merlin-2 location will come from logging while drilling and mudlogging that’s being completed during the current drilling phase.

Further updates will be available after 88E reaches total depth, after which a sophisticated wireline logging program will be run, spanning a further 5-7 days.

As we mentioned in our Investment Memo, the reason that drilling Merlin-2 is our single key objective for 88E this year is that a discovery here would be a potential company maker, and put 88E on the radar of oil and gas majors in the area.

Keep in mind that 88E’s 652 million barrel prospective resource at Peregrine is analogues to the Willow Oil Field that is owned by Alaska’s leading oil producer, ConocoPhillips.

Drilling was completed at Merlin-1 in April 2021, demonstrating the presence of oil in multiple targets in the Nanushuk Formation. The Merlin-2 well was designed to appraise primary targets that were encountered in Merlin-1.

While the placement of the Merlin-1 well was suboptimal with respect to reservoir development, it is anticipated that Merlin-2 will reveal thicker and higher porosity/permeability formations.

There is a lot riding on the results here, plus they will help us determine what we want to see the company deliver for the rest of the year.