88E is an ASX listed Oil and Gas explorer listed on the ASX with a dominant land holding in Alaska and a comprehensive exploration and appraisal program.
Summary Key Points
- Well has reached TD on schedule: The Icewine#2 well has reached terminal depth (TD) at 11,450’ (3,816m) on schedule. This key milestone has been reached without incident. There has been an minor issue with the installation of the production liner but the replacement is expected to be completed this week with no impact on the forward program.
- Wireline logs have been run: A comprehensive suite of wireline logs have been run through the production interval. 88E have reported that the data quality is excellent and is consistent with the data and logs from Icewine#1. The data from the logs and coring will be used to finalise the optimal design for the hydraulic stimulation that is planned for late June to early July.
- Micro-stimulations to be carried out this week: 88E are planning to conduct small trial fracks to optimise the design of the upcoming stimulation program.
- Main stimulation to start next month: 88E are on track to complete the main fracking program and production testing for late June early July.
The successful drilling and completion of the Icewine#2 well is an important milestone in the program. The fact the well has been drilled to TD and is almost completed bar a minor delay but is still on schedule is a positive outcome and bodes well for the program being a technical success. The planned stimulation and flow back will be the next key milestone but it does seem as if 88E is in a favourable position to carry out the next stage of testing post the final completion of the well.
- The successful Hydraulic Fracturing of ICEWINE#2.
- Flow back testing from ICEWINE#2.
- Further positive geological data from ICEWINE#2 to supplement the dataset from ICEWINE#1.
- Identification of conventional drill targets from the recently completed seismic survey.
- Farm-in from large oil and gas player.
We value 88E at a $0.085 share and maintain our Speculative Buy Recommendation.
Disclosure and Disclaimer
This Research Report, accurately expresses the personal view of the Author(s).
At the date of this report, DJ Carmichael Pty Limited, members of the Research Team; including authors of this report, its directors and employees advise that they may have an interest in and/or earn brokerage and other benefits or advantages, either directly or indirectly from client transactions in stocks mentioned in this report. DJ Carmichael Pty Limited acts as Corporate Adviser to 88 Energy Limited and is paid a fee for that service. DJ Carmichael Pty Limited arranged a placement in 88 Energy Limited in March 2017 of 21.2 million shares that raised $784,000 and was paid a fee for that service.
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SPECULATIVE BUY – Potential 10% out-performance, but high risk
BUY – Potential 10% or more out-performance
ACCUMULATE – Potential 10% or more out-performance, buy on share price weakness
HOLD – Potential 10% underperformance to 10% over performance
SELL – Potential 10% or more underperformance
Period: During the forthcoming 12 months, at any time during that period and not necessarily just at the end of those 12 months. Stocks included in this report have their expected performance measured relative to the ASX All Ordinaries Index. DJ Carmichael Pty Limited’s recommendation is made on the basis of absolute performance. Recommendations are adjusted accordingly as and when the index changes.
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