Interpretation of initial petrophysical data from the Merlin-1 well on Alaska’s North Slope has given 88 Energy Ltd. hope for several potential pay zones, but operational issues prevented the Australian E&P from getting hydrocarbon samples from its two most prospective zones.

Despite the issues encountered, the results are “encouraging for the potential at Project Peregrine,” 88 Energy Managing Director David Wall said in a news release. The project covers about 195,000 contiguous acres and is on trend to recent discoveries—including ConocoPhillips’ Willow oil field— in the Nanushuk Formation.

“We appreciate that these early results may be difficult to interpret. That is because we do not yet have all the data required to allow interpretation,” Wall said. “This means some uncertainty remains; however, it is already clear that Merlin-1 has delivered by far the best outcome of any of the five wells drilled by 88 Energy in Alaska over the last six years.”

Project Peregrine and Recent Nanushuk Discoveries Source 88 Energy
Source: 88 Energy

Located in the National Petroleum Reserve-Alaska region of the North Slope, the Merlin-1 well was spud on March 10 and drilled to a total depth of 5,267 ft. 88 Energy said it identified multiple prospective zones in sandstone reservoir between depths of 3,400 ft and 5,100 ft as part of the first run of a wireline program.

Using an optical fingerprint sensor in the downhole sampling tool, initial observations during the program’s second run indicated the presence of an oil signature in the fluid in the deepest zone. The company said slugging of hydrocarbon and water occurred, but a power outage caused by equipment failure forced the company to pull out of the hole—without collecting samples—to make repairs.

“After repairs were completed, the run back in hole encountered several sticky sections, indicating poor hole condition so a clean out run was undertaken,” 88 Energy said in the release. “Re-entry with the sampling tool was then executed to move to the lowest zone for testing but good communication was not able to be re-established with the reservoir despite observation of a similar hydrocarbon signature on the optical fingerprint sensor.”

The company believes the amount of time the hole was open and consequent potential formation damage may have contributed to this issue.

A stuck tool prevented the team from sampling the next shallowest zone. The tool was eventually freed, 88 Energy said, but “the risk of returning to that zone was deemed too high.”

The company said analysis of sidewall cores and potential additional drilling may be required to confirm a discovery.

“One of these zones is considered to be a new prospective horizon within the Nanushuk Formation that may be wholly within the Project Peregrine acreage and was not one of the pre-drill targets,” the company said. “The other zone is interpreted to be shared with one of the zones in the Harrier prospect, to the north of Merlin. Further work, integrating the results from logging with the seismic, is required to map/re-map the volumetric potential of these zones.”

Merlin-1 well on trend with Willow Source 88 Energy
Source: 88 Energy

Samples were also taken in zones believed to be less prospective, and all contained low saturations of hydrocarbons that will now be sent to a laboratory for testing, the company said.

However, “it is now too late in the season to initiate flow testing operations and the forward program will consist of plugging the well,” 88 Energy said. If warranted, the well could be reentered later for a sidetrack and flow test.