88 Energy's Merlin-1 well confirms presence of light oil

Oil exploration and appraisal company 88 Energy said on Monday that post-well evaluation of its Merlin-1 well had successfully demonstrated the presence of oil in multiple stacked sequences in the Cretaceous Nanushuk Formation.

88 Energy stated wireline analysis and core data correlated to 41 feet of net log pay across three reservoir intervals, with results of the post well formation evaluation, including core and reservoir description tool data determining the presence of moveable hydrocarbons.

Geochemical analysis of the cores determined the presence of "a light oil" with an estimated American Petroleum Institute gravity between mid-30 to low-40 API.

The AIM-listed firm also noted that an additional new target, the N19 sand, that was not previously mapped, also returned "a strong hydrocarbon signature" following geochemical analysis.

88E said: "Given the up-dip location of the Merlin-1 well with respect to the N20, N19 and N18 reservoirs, hydrocarbon shows and sand quality at this location was consistent with pre-drill expectations. 88 Energy has identified appraisal drilling locations to the east of the Merlin-1 well, closer to the shelf break, where enhanced reservoir thickness and quality are expected.

"Post well analysis has also determined that the N14 horizon, one of the targets of the Merlin-1 well, was not intersected, as it is believed to lie below the total depth of the well. The N14 prospect remains a target of interest and the Merlin-1 well may be re-entered in order to test this prospective target as part of the company's future drilling activities at Project Peregrine."

As of 1045 BST, 88 Energy shares were up 9.81% at 2.60p.