The 88 Energy share price soars 12% on Merlin-1, Project Icewine updates!

Fresh news on work at its Alaskan assets has sent the 88 Energy share price soaring once more. Here are the key details that you need to know.

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The 88 Energy (LSE: 88E) share price has been on a wild ride in recent weeks amid a slew of operational updates on its Alaskan assets.

The share price closed at four-year highs of 3.75p per share in March. This was after promising testing data at its Merlin-1 well. But subsequent problems in verifying the quality of the well caused the oilie to collapse back towards 1p.

But today, 88 Energy is back on the charge and up 12% from Monday’s close at 1.35p per share. Here’s why investors have piled back in following the company’s latest operational update.

88 Energy’s share price soars again

As I say, 88 Energy encountered problems in April when conducting a wireline programme at Merlin-1. It led the company to abandon testing work at least temporarily and plug the well.

Back then, the AIM company said that further drilling and an analysis of sidewall cores might be required to confirm a discovery at Merlin-1. And on Tuesday, the oilie confirmed that testing on sidewall cores, cuttings, mud gas and fluid samples is underway. It said that testing will take between two and 10 weeks to complete.

Testing will be carried out “to determine oil saturation, oil typing, PVT [pressure volume temperature] characteristics, porosity, permeability and rock mechanics,” it said. The business added that cuttings will be subject to a Volatiles Analysis Service too. This will help it to interpret results from the well.

Silhouette of an oil rig

In other encouraging news, 88 Energy said that “initial mapping of additional prospective zones encountered in Merlin-1 [is] encouraging.” It said that these zones “exhibited good shows with potential for pay,” and that “an initial mapping exercise has indicated that these zones may be of similar magnitude in terms of volumetric range as the originally targeted primary zones.”

Further testing would be required to confirm what it is sitting on, it added.

More exciting news

On Tuesday 88 Energy also announced some potentially exciting news concerning its Project Icewine asset in Alaska. It said that it has been observing nearby work by Pantheon Resources on its Talitha-A well. And these results have revealed “additional insights into the wettability of the Kuparuk formation,” the firm noted. These are results that it says may have “positive ramifications” for its own interpretation of the horizon.

88 Energy said its own drilling results at Kuparak had been interpreted “as likely gas condensate or residual oil”. As a consequence, no mapped targets had been identified by the company. However, 88 Energy views those recent Talitha-A results as “highly encouraging regionally for the Kuparuk [and] across Project Icewine.” Its internal geoscience team is therefore now re-assessing Kuparak’s potential.

To round off the release 88 Energy said that “it is also evident that several of the other prospective horizons encountered in Talitha-A, where pay has been interpreted by Pantheon, extend into Project Icewine acreage.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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