2.5 Billon Barrels Conventional Oil7 Nov 2018 00:11
2.5 Billon Barrels Conventional Oil Potential – Farm-out/Drilling Imminent
More widely known for its Alaskan shale adventure of recent years, 88 Energy has quietly amassed a conventional oil portfolio of almost 2.5 billion barrels (net mean prospective). That is significantly more than any other junior company listed on the ASX and to top it off, there is a long list of other factors working in the Company’s favour:
•All of these resources are located in one of the oiliest places on the planet – the North Slope of Alaska, home to North America’s largest conventional oilfield Prudhoe Bay – just a lazy 15 billion barrels produced to date
•This is onshore not offshore – not quite as cheap as Texas but more cost competitive and fiscally attractive than pretty much anywhere else that has this much potential
•The North Slope was once the playground of only the majors, which resulted in significant under exploration but has opened up in recent years to smaller independents – one of whom is 88 Energy
•This has been proven out by a spate of discoveries over the last 5 years – totalling over 5 billion barrels of conventional oil – driven by both the underexploration mentioned above and advances in 3D seismic technology
•The hit rate in the last 5 years on 3D seismic is 29 from 30 wells – 5 out of 6 being pure exploration
•88 Energy has 3D seismic at all three of its conventional projects, which will be described in more detail below
•All of the work done by 88 Energy was done whilst the oil price was low – with the large increase in price this year, the time is right to do a deal
•The current share price has been depressed by a disappointing well result in mid-year followed by a rights issue – once these wash through the share price will be free to trade up in the lead up to significant news events
•News flow over the next four months is potentially transformational with a farm-out pending prior to year-end over the 2.9 billion barrel Icewine project (2.2b net to 88E) followed closely by drilling at the 400 million barrel Winx prospect (144MMBO net to 88E) in February 2019
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