- 88 Energy Limited (DI)
- 29 April 2024 17:21:37
Source: Sharecast
The AIM-traded firm said the comprehensive flow test and well stimulation programme, valued at a fully funded budget of $11m, would follow the completion of crucial preliminary steps, including ice road construction, pad construction, and rig mobilisation.
It said it had carried out design, planning, and logistics preparations, with the permitting process proceeding on track, expected to be completed by the end of January.
The Hickory-1 flow test would focus on evaluating two primary test targets - the Slope Fan System (SFS) and Shelf Margin Deltaic (SMD) zones.
To ensure precision in the assessment, each of the zones would undergo separate testing, with approximately ten days allocated to each phase.
While Hickory-1 is a vertical well and may not be optimal for the production phase, 88 Energy said it would play a critical role in collecting essential data for development planning.
That information would encompass reservoir deliverability, fluid compositions, pressures, and connectivity.
The board noted that flow rates from horizontally developed wells, such as those envisioned for the development of Project Phoenix, were projected to be six to 12 times higher than those achievable from vertical wells.
“Any future development plan for Project Phoenix will almost certainly include horizontal wells with unconventional completion technology to maximise oil rates,” the 88 Energy board said in its statement.
“As is evidenced in many Lower 48 analogues, horizontal well production rates typically produce at rates that are six to 12 times higher than vertical wells once lessons from field development are captured in the appraisal phase.
“Offset exploration vertical well tests, similar to the Hickory-1 discovery well, have all flowed in the 50 to 100 barrels of oil per day range per test.”
88 Energy said water-to-oil ratios, gas-to-oil ratios and the evolution of rates and pressures over time were critical datasets that assist in development planning and forecasting.
“It is not uncommon for formation water to be produced sustainably in conjunction with hydrocarbons in these types of reservoirs, as is often observed in producing analogues in the Lower 48.
“Vertical wells provide cost effective access to test multiple reservoirs in a single wellbore and are therefore the crucial first steps on the path to development of Project Phoenix resources.”
At 1452 GMT, shares in 88 Energy were down 4.69% at 0.23p.
Reporting by Josh White for Sharecast.com.