10th Feb 2016 09:12
LONDON (Alliance News) - 88 Energy Ltd shares soared on Wednesday after it further de-risked the HRZ shale formation play at the Icewine-1 exploration well in Alaska as samples showed better than expected permeability and porosity in line with expectations.
"Two of the three main 'Achilles Heels', being thermal maturity and matrix permeability, have now been substantially de-risked, coming in at, or above, pre-drill expectations," said Managing Director Dave Wall.
88 Energy shares were up 49% to 0.507 pence per share on Wednesday morning.
88 Energy has been evaluating the core of the HRZ shale formation intersected in the Icewine-1 well after revealing last month that initial observations of oil/condensate leaching from the core indicated the presence of liquid hydrocarbons in the HRZ shale.
88 Energy said core sample evaluation has met or beaten expectations concerning porosity and permeability, which are both absolutely necessary to make a productive oil or gas well.
On Wednesday, 88 Energy said the matrix permeability within the core taken from the HRZ shale "exceeds expectations", being several times greater than the effective cut-off in all the 18 samples that were measured.
Permeability, which is affected by the pressure in a rock, is an indication of the ability for fluids like gas or liquids to flow through rocks, with high permeability allowing fluids to move rapidly through rocks.
However, two of those samples displayed permeability which was too high to be measured using a standard technique, which 88 Energy said potentially indicates the presence of "permeability super highways".
The 16 samples that were evaluated were measured using the Gas Research Institute method, which involves crushing the core sample to fine grained particles thereby eliminating coring and sampling induced fractures to ensure more accurate results.
The porosity of the core has also been confirmed to be at the upper end of the company's expectations, and 88 Energy said this could increase further once it integrates the porosity data with other data.
Porosity of a rock is a measure of its ability to hold a fluid and is normally presented as a percentage of the total rock which is taken up by pore space, which holds the hydrocarbons.
"Additional work remains, including that associated with fraccability and final thermal maturity; however, at this stage of the evaluation we could not have hoped to be in a better position," said Wall.
"Seismic planning is at and advanced stage with acquisition planned to commence in March 2016, subject to final negotiations with vendors and approval of the proposed program by Bank of America," 88 Energy added.
By Joshua Warner; [email protected]; @JoshAlliance
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