88 Energy shares sent to the doghouse as Merlin-2 well comes up empty-handed
88 Energy shares are down -50% at noon after wireline logging result fell well-short of expectations
Source: Unsplash
Mentioned
KEY POINTS
- 88 Energy failed to obtain fluid samples from the Merlin-2 well in Alaska
- Reservoir quality was not sufficient to progress to a production test
- 88 Energy shares previously rallied in anticipation of success at Merlin-2
88 Energy (ASX: 88E) shares have been sent to the doghouse, down -51% at noon after results from a wireline program fell well-short of expectations.
For the uninitiated, 88 Energy began drilling the prospective Merlin-2 appraisal well in early March. A $32m capital raising was completed in mid-February at 3.5c per share to help fund the appraisal well drilling and flow test program.
The Merlin-2 appraisal well planned for a total depth of 8,000 feet, and targeting 652m barrels of oil across several highly prospective targets.
At the end of drilling activities, wirelines are lowered into the well to confirm whether any mobile hydrocarbons are present as well as evaluate factors such as reservoir quality and flow potential of target zones.
Nothing to show
Unfortunately, provisional analysis of the wireline logging program indicated that reservoir quality was insufficient to warrant a production test.
The company had a production test program designed and on standby.
“Whilst the initial results from the Merlin-2 well were encouraging, results from the wireline program have demonstrated target zones to have lower than anticipated porosity and permeability resulting in difficulty obtaining fluid samples,” said Managing Director Ashley Gilbert.
"However, we will now take the necessary time to fully analyse the data from the Merlin-2 well."
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