88 Energy to drill vertically rather than laterally at Alaskan well

Australian oil and gas company 88 Energy has revised the design for its Alaskan Icewine-2 well and now intends to drill vertically, rather than laterally, to reduce costs and risks.

AIM-listed 88 Energy, along with its joint-venture partner Burgundy Xplorartion, found that a vertical well with multi-stage stimulation would save about $5m and would decrease drilling risks compared to the more complex lateral well.

Significantly, 88 Energy would now be able to fully fund the well from its existing cash position.

It will also increase the availability of suitable rigs to the onshore well at the North Slope of Alaska, and result in a more competitive tender process.

Interpretation of the inline/crossline 2D seismic data covering the Franklin Bluffs area was at an early stage, but was progressing well thanks to the excellent quality of the data, the company said in a statement.

Further interpretation and analysis was required to evaluate the exploration potential.

The company had also nearly completed the processing of the 2D seismic data covering nearly two thirds of the Project Icewine acreage.

88 Energy continued to expect interpretation of the Icewine 2D data to begin in September 2016, with results following several weeks later.

Managing director Dave Wall, said: "The revision to the well design has resulted in a best of both worlds scenario for 88 Energy and its shareholders. We now have a more efficient, lower cost outcome that optimises achievement of the operational objectives targeted by the Icewine 2 well.

“Additionally, we are highly encouraged by the initial results from the 2D seismic at this very early stage of interpretation."

Shares in 88 Energy were down 19.85% to 2.64p at 0951 BST.