Expansion of Icewine acreage a good balance, says 88 Energy

Alaska-focussed 88 Energy updated the market on Project Icewine, located onshore North Slope of Alaska, on Wednesday, confirming the project’s gross acreage position had been expanded to 460,000 acres from 350,000, with its net acreage position increased to 286,000 acres from around 260,000.

The AIM-traded company said the Icewine joint venture was recently awarded certain leases successfully bid on in the 2016 North Slope licensing round.

After negotiation and consideration, it was determined to take up 43% of those acres with 88 Energy - via its subsidiary Accumulate Energy Alaska - having a 25% working interest and the remainder with joint venture partner Burgundy Xploration, which will have right to operate.

The board said quantum of acres and working interest taken up by each party were determined largely by ongoing confidence by the joint venture in the potential of the HRZ shale play; fine-tuning of the area deemed most prospective for the HRZ shale play; the desire of Burgundy to increase its net acreage position and have right to operate on certain acres; and balance for 88 Energy between increasing its “already extensive” net acreage position and management of current cash position against a planned work programme.

It said the objective was to maximise value creation for shareholders whilst minimising dilution.

“The joint venture remains committed and confident in the HRZ shale play,” said 88 Energy’s managing director Dave Wall.

“The leasing strategy has been designed to strike a balance between this confidence and available capital whilst we build towards completion of the flowback and production testing of the Icewine#2 well in 1H 2018.

“Additional details on this program as well as the planned 3D seismic acquisition will be released in the coming weeks.”