15th Feb 2016 08:21
LONDON (Alliance News) - 88 Energy Ltd shares soared on Monday after the company said its estimates for the Icewine-1 well in Alaska have been confirmed to be correct by the evaluation of the HRZ shale core, and said the majority of its acreage lies in a "thermal maturity sweetspot".
88 Energy shares more than doubled to 2.41 pence per share on Monday, comfortably the best performer in the AIM All-Share in early trade.
The company said the final thermal maturity analysis of the core of the HRZ shale interval has confirmed the company's pre-drill predictions concerning the Icewine-1 well to be accurate.
88 Energy said the majority of its 272,000 acres that have been mapped lie in a thermal maturity "sweetspot", containing low viscosity vapour phase hydrocarbons modelled to flow at a "material rate" based on the porosity and permeability results.
"Thermal maturity based on vitrinite reflectance analysis has confirmed that Icewine-1 is in the predicted sweetspot where the volatile oil window meets the gas condensate window. This is consistent with the earlier interpretation announced from geochemical analysis of gases in drilling mud whilst drilling through the HRZ as well as rock evaluation work on the core," said Managing Director Dave Wall.
88 Energy had already said last week that the porosity of the core had been confirmed to be at the upper end of the company's expectations whilst the permeability of the core exceeded expectations.
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. 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.
On Monday, 88 Energy said the initial observation of the rock mechanics and "fraccability" of the rock are both "encouraging".
"The joint venture now looks forward to the challenge of designing the optimal extraction method for the potentially very large resource in the HRZ shale play, and early observations on this front are encouraging," said Wall.
"The HRZ is a new resource play and will not to be without its own unique peculiarities; however, given the size of the potential prize, we are confident that substantial interest will be garnered to support the next phase of the project, which will include the drilling of a horizontal well with a multi-stage fracture stimulation," he added.
88 Energy will now work toward an independent resource report whilst working on the rock mechanics, integrated petrophysical analysis and the characterisation of the "resource prize potential," it said.
By Joshua Warner; [email protected]; @JoshAlliance
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