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88 Energy (ASX:88E) soars on hydrocarbon potential at Merlin-1

88 Energy (ASX:88E) shares have soared after discovering potential hydrocarbon bearing zones while drilling at its Merlin-1 well, located at Project Peregrine in Northern Alaska.
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  • 88 Energy (88E) shares have soared after discovering potential hydrocarbon-bearing zones while drilling at its Merlin-1 well, located at Project Peregrine in Northern Alaska
  • Drilling data has encountered the Nanushuk Formation around 600 feet low to prognosis and is interpreted to be around 500 feet thicker than that encountered in the Willow Oil Field, Analogue Wells, to the north of the project
  • The gamma log indicates more sand packages than those in the Analogue Wells, which are also generally cleaner in nature
  • However, the company is waiting for wireline logging completion to confirm reservoir quality
  • Significant oil shows were recorded and one of the prospective horizons showed substantially elevated total gas, similar to that in the Analogue Wells.
  • Managing Director Dave Wall says while the results are encouraging, there is still work to be done to confirm a discovery and the company plans to provide an update within 10 days
  • Shares have jumped 19.4 per cent to 3.7 cents

88 Energy (88E) shares have soared after discovering potential hydrocarbon-bearing zones while drilling at its Merlin-1 well, located at Project Peregrine in Northern Alaska.

Last week, the well was successfully drilled to a depth of 1512 feet.

Now, the drilling data has encountered the Nanushuk Formation around 600 feet low to prognosis and is interpreted to be around 500 feet thicker than that encountered in the Willow Oil Field, Analogue Wells, to the north of the project.

The company says it's encouraged by the gamma log, which indicates more sand packages than those in the Analogue Wells, which are also generally cleaner in nature.

However, analysis of the wireline logging will need to be completed to ascertain the reservoir quality.

Oil shows were also recorded over multiple intervals in the Nanushuk, including the primary targets.

88 Energy says fluorescence ranged from relatively weak to moderate “dry” with slow to moderate — sometimes fast — streaming cut when exposed to solvent.

Mud gas peaks were recorded but not notably significant, one of the prospective horizons however, showed substantially elevated total gas, similar to that in the Analogue Wells.

Additionally, heavier gas components, including C5, were observed over multiple intervals. Resistivity was elevated over these intervals, which the company says is encouraging, particularly because the Nanushuk is considered a low resistivity play type.

Fluorescence was also observed in the drilling mud pops, accompanied by a petroliferous odour over three of the target intervals.

Significantly, one of these intervals is interpreted to be part of a potentially separate, sand package that is also shown at Harrier-1, the second well which is due to be drilled next year.

88 Energy's Managing Director, Dave Wall, commented on the results.

“Whilst there is still work to do to confirm a discovery, the results to date are encouraging and we look forward to providing an additional update on the wireline program in seven to 10 days.”

Shares have soared 19.4 per cent on the back of the news to 3.7 cents each at 10:00 am AEDT.

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