88 Energy Ltd. said Nov. 19 it has acquired an additional 174,240 gross acres in Alaska's North Slope.
A subsidiary of the Australian company and its joint venture (JV) partner, Burgundy Xploration LLC, won the bid for the acreage at the North Slope Areawide Bid Sale, according to the release.
The JV has paid a non-refundable 20% down payment of US$947,000 to secure the rights to the acreage.
Finalization of the acquisition is subject to formal award and payment of the remainder of the bid plus US$10 per acre rentals. The total value is estimated to be about US$5.5 million, the release said.
The acreage is contiguous to the JV's current position at Project Icewine. The partnership now has a 272,242 gross acre position in Alaska, which is almost triple that prior to the acquisition, the release said.
Highlights:
- Horizontal shale play potential now internally estimated at more than 2 billion barrels recoverable across the expanded acreage position;
- Conventional play potential has more than doubled;
- Scale now more attractive to major oil and gas companies/national oil companies; and
- Risk is diversified as more acreage increases the chances of one or more play types being successful.
88 Energy plans to launch a small capital raising to fund its portion of the acquisition, the release said.
"After shareholders have contributed A$20 million to Project Icewine, it is strategically imperative to secure the dominant position in the play ahead of the results of the Icewine#1 well," said Dave Wall, managing director of 88 Energy in a statement.
"We do not want to prove up a play and then have someone else acquire a large portion of it," Wall added.
Wall said any success at Icewine#1 will result in "substantial industry interest, which we hope will lead to a highly accretive farm-out in 2016."
Recommended Reading
Ohio Utica’s Ascent Resources Credit Rep Rises on Production, Cash Flow
2024-04-23 - Ascent Resources received a positive outlook from Fitch Ratings as the company has grown into Ohio’s No. 1 gas and No. 2 Utica oil producer, according to state data.
TPH: Lower 48 to Shed Rigs Through 3Q Before Gas Plays Rebound
2024-03-13 - TPH&Co. analysis shows the Permian Basin will lose rigs near term, but as activity in gassy plays ticks up later this year, the Permian may be headed towards muted activity into 2025.
Range Resources Expecting Production Increase in 4Q Production Results
2024-02-08 - Range Resources reports settlement gains from 2020 North Louisiana asset sale.
Barnett & Beyond: Marathon, Oxy, Peers Testing Deeper Permian Zones
2024-04-29 - Marathon Oil, Occidental, Continental Resources and others are reaching under the Permian’s popular benches for new drilling locations. Analysts think there are areas of the basin where the Permian’s deeper zones can compete for capital.
Chevron Hunts Upside for Oil Recovery, D&C Savings with Permian Pilots
2024-02-06 - New techniques and technologies being piloted by Chevron in the Permian Basin are improving drilling and completed cycle times. Executives at the California-based major hope to eventually improve overall resource recovery from its shale portfolio.