Proactive Investors - 88 Energy Ltd (LON:88E) shares strengthened some 22% in Monday’s early deals after telling investors that it has reached total depth in the Hickory-1 exploration well in Alaska, which has now encountered three further secondary targets.
The company, in a statement, followed up last week’s encouraging initial results – which confirmed the well’s primary targets – with today’s update detailing the presence of at least three more zones which either met or exceeded expectations.
88 Energy said that Hickory was drilled down to a depth of 10,650 feet. It encountered pay in the primary SMD reservoirs along with the SFS reservoir, an unexpected ‘upper SFS’ reservoir and BFF reservoir.
“The presence of hydrocarbons was evidenced by fluorescence under ultraviolet light in multiple cuttings samples in the primary and secondary targets, including new Upper SFS reservoir,” 88 Energy said.
“Elevated C3-C5 mud gas readings were also observed across all reservoir intervals. In particular, it was noted that mud gas readings were greater than 15x background gas over both SFS intervals.”
As previously announced, the company had decided to end the well at a shallower depth which leaves the originally targeted Kuparuk (KUP) reservoir targets untested in this well programme.
An exercise to measure total net pay across all encountered zones is now set to get underway, the company added. This will include an analysis of logging-whilst-drilling data and a wireline logging operation, as well as well core analysis.
Wireline work is expected to take around five to seven days to undertake and after that, the well will be completed for future testing.
It is planned that a flow testing programme will gather more detailed information about the potential new discoveries in the 2023/24 winter season.
In London, 88 Energy shares gained 0.11p or 22.7% to change hands at 0.61 each valuing the explorer at just over £100mln.
--Updated to include share price reaction, originally published at 7:47am.