(Alliance News) - 88 Energy Ltd on Tuesday said it has procured a rig for drilling a well at its Icewine project in the US state of Alaska.
88 Energy shares were up 8.9% at 0.75 pence each in London in morning trade.
The company's unit Accumulate Energy Alaska Inc has executed a rig contract with Nordic-Callista Services to utilise Rig-3 for the upcoming drilling of the Charlie-1 appraisal well.
The Charlie-1 well has been designed as a step out appraisal of a well drilled in 1991 by BP Exploration (Alaska) Inc called Malguk-1.
Malguk-1 well encountered oil shows with elevated resistivity and mud gas readings over multiple horizons during drilling but was not tested due to complications towards the end of operations, which resulted in lack of time before the close of the winter drilling season.
88 Energy previously utilised Rig-3 in March for the drilling Winx-1 well, also located in Alaska, and said it waas pleased with its safe and efficient performance throughout the course of operations.
Significant progress has been made on the permitting front, the company said, with only two of the key permits - the Plan of Operations and Permit to Drill - in the process of being finalised and approved. Tendering and finalisation of contracts for equipment and services required for the Charlie-1 well are advancing as planned, 88 Energy added.
Drilling of Charlie-1 well is scheduled to start in February with flow testing anticipated to conclude in April. The total gross mean prospective resource across the seven targets to be intersected by Charlie-1 well is 1.6 billion barrels of oil, with 480 million net to 88 Energy.
88 Energy also said conditions relating to the farm-out agreement with Premier Oil PLC are expected to be met by the end of November.
Premier Oil in August signed a farm-in agreement with 88 Energy to farm-in for a 60% interest in area A of project Icewine. Under the agreement, Premier agreed to pay the full costs of Charlie-1 well, up to a total of USD23 million.
By Tapan Panchal; tapanpanchal@alliancenews.com
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88 Energy (88E)