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(Sharecast News) - 88 Energy reported a major milestone at Project Phoenix in Alaska on Wednesday, announcing a significant increase in contingent resources independently verified by ERCE Australia.
The AIM-traded firm said the new estimates for the SMD-B and SFS reservoirs added an additional gross 128 million barrels of oil equivalent, boosting the project's existing gross best estimate '2C' contingent resources by over 50%.
It said the total combined gross best estimate contingent resource for Project Phoenix now stood at around 378 million barrels of oil equivalent, with 239 million barrels net entitlement to 88 Energy.
That confirmed the project as a robust multi-reservoir discovery, incorporating assessments from both ERCE and Netherland, Sewell & Associates.
The resources included 251 million barrels of oil and natural-gas liquids across four stacked reservoirs, all accessible from a single surface location.
In addition to the upgraded contingent resources, 88 Energy said there was significant upside potential in the undrilled Kuparuk reservoir and the SMD-A and SMD-C reservoirs, where oil had been interpreted on logs at the Hickory-1 well.
Independent verification by Lee Keeling and Associates estimated net mean unrisked prospective resources of 155 million barrels, with geological chances of success ranging from 71% to 81%.
Project Phoenix benefited from strategic positioning on Alaska State lands, adjacent to the Trans-Alaska Pipeline System and the Dalton Highway, and near the oil and gas services hub at Deadhorse.
The board said the project had successfully recovered premium light oil with an API gravity of 37 to 40 degrees, enhancing its commercial viability.
An extended horizontal well flow test of the SMD reservoir was in the planning and design stage, using the existing Franklin Bluffs gravel pad.
88 Energy was also in discussions with joint venture partner Burgundy Xploration, which could result in Burgundy carrying all or part of 88 Energy's share of the 2025-2026 work programme in exchange for an increased working interest in Project Phoenix.
"This additional contingent resource estimate reaffirms the substantial potential of Project Phoenix, with four independent reservoirs now confirmed as discoveries," said managing director Ashley Gilbert.
"The confirmation of a multi-hundred-million-barrel discovered oil and NGL resource is a major milestone for 88 Energy and its shareholders.
"We are now focused on planning an extended period horizontal flow test of the SMD reservoir, utilising the existing Franklin Bluffs gravel pad infrastructure."
Gilbert said that the company was simultaneously in discussions with its joint venture partner regarding the next stage of advancement of the project.
"This may include Burgundy carrying 88 Energy's share of the anticipated 2025-2026 work program in exchange for an additional working interest in Project Phoenix.
"Additionally, we will initiate a formal farm-out process in the fourth quarter of 2024 to ensure the next phase of Project Phoenix's activities is well-funded.
"Shareholders can look forward to more updates on our progress as we continue to mature and de-risk Project Phoenix towards a future potential commercialisation event."
At 1057 BST, shares in 88 Energy were up 6.38% at 0.1p.
Reporting by Josh White for Sharecast.com.