Next Investors logo grey

88 Energy receives prompt permit to drill at Merlin-1


Published 01-FEB-2021 09:21 A.M.


3 minute read

Hey! Looks like you have stumbled on the section of our website where we have archived articles from our old business model.

In 2019 the original founding team returned to run Next Investors, we changed our business model to only write about stocks we carefully research and are invested in for the long term.

The below articles were written under our previous business model. We have kept these articles online here for your reference.

Our new mission is to build a high performing ASX micro cap investment portfolio and share our research, analysis and investment strategy with our readers.

Click Here to View Latest Articles

88 Energy Limited (ASX:88E: AIM:88E) has provided a promising update in relation to its operations in the NPR-A region of the North Slope of Alaska.

Management confirmed that its Permit to Drill has been approved for the Merlin-1 well, located in the NPR-A region of the North Slope of Alaska.

The permit was deemed complete by the Alaska Bureau of Land Management (BLM) on 28 January and was submitted to the Deputy Assistant Secretary for Land and Minerals Management for approval.

That approval was granted in just 24 hours, ahead of the expected 12 February approval date.

While permit approvals don’t normally receive a great deal of publicity, this was particularly significant against a backdrop of uncertainty regarding permitting under the Biden government that was mainly rumour-driven.

It is worth noting that the Biden administration has already issued more than 30 new drilling permits, authorising operations on federal land and coastal waters.

Strong support at federal and local level

In anticipation of the approval, field operations recommenced last week with commissioning of Rig 111 nearing completion.

Rig mobilisation is scheduled to commence later this week. A single lane snow road into the Merlin-1 location is expected to be finished in about 2 weeks.

Spud of Merlin-1 is now expected in late-February / early-March 2021.

We would like to once again thank the Alaska Congressional Office and the BLM for their support of our project as well as the Deputy Assistant Secretary for Land and Minerals Management.

Managing Director Dave Wall highlighted the support for the project that both a local and federal level in saying, “After a brief hiatus in activity, it is now back to full operations with ramp up towards the spud of Merlin-1, which is expected in around four weeks.

"The support received for our project at the local and Federal level has been extremely satisfying and we are very grateful to all involved in getting things back on track.”

88E carried on the first US$10 million of the Merlin-1 well

Project Peregrine is located in the NPR-A region of the North Slope of Alaska and encompasses nearly 200,000 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 that will reduce to 50% post the completion of funding as part of a recent farm-in, whereby 88E is carried on the first US$10 million of an estimated US$12.6 million total cost for the Merlin-1 well.

57 - 88E - map.PNG

The Merlin-1 well is targeting 645 million barrels of gross mean prospective resource, and flow testing is planned if wireline logging confirms a discovery.

A second well (Harrier-1) is planned to commence immediately following completion of operations at Merlin-1, subject to results from Merlin-1, schedule and permit approvals.

Harrier-1 is expected to cost approximately US$7 million, and it is targeting a gross mean prospective resource of 417 million barrels.

Each of the Merlin and Harrier prospects is located on trend to an existing discovery, in the same play type as illustrated above (Nanushuk topsets).

This has de-risked the prospects considerably and resulted in a relatively high independently estimated geologic chance of success (COS) as outlined below.

57a - 88E - resource assessment

The following graphic highlights Merlin-1’s trend correlation to the Willow discovery.

57b - 88E - Willow map

General Information Only

S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.

Conflicts of Interest Notice

S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.

Publication Notice and Disclaimer

The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.

Any forward-looking statements contained in this article are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results or performance of companies featured to differ materially from those expressed in the statements contained in this article. S3 cannot and does not give any assurance that the results or performance expressed or implied by any forward-looking statements contained in this article will actually occur and readers are cautioned not to put undue reliance on forward-looking statements.

This article may include references to our past investing performance. Past performance is not a reliable indicator of our future investing performance.