Both Red Emperor Resources (LSE:RMP) and 88 Energy (88E) were trading up on Friday after announcing that the spudding of a well at their shared prospect on the North Slope of Alaska is on schedule.
Red Emperor and 88 Energy owns 31.5pc and 36pc positions respectively in the Western Block, where the Winx-1 exploration well is on track to begin drilling later today.
As operator, 88 Energy said the Nordic Rig#3 arrived on location as planned on 7 February 2019. Since then, rig-up activities have proceeded smoothly, and final preparations for spud are now underway. The call to “crew-up” was made at 05:30 on 14 February 2019, Alaska time. Red Emperor said this typically indicates that spud will occur within 24 hours. Following the news, Red Emperor was trading up 3.3pc to 4.5p while 88 Energy was up 1.4pc to 1.1p.
The drilling and testing of Winx-1 are expected to take around 50 days in a success case scenario. Winx is a 3D seismic defined, conventional oil prospect located in Alaska’s successful Nanushuk play fairway. According to Red Emperor, Nanushuk is one of the largest conventional oil fields discovered in the US in more than 30 years.
Winx contains a gross mean unrisked prospective resources of 400MMbbls and is adjacent to the Horseshoe 1/1A discovery well drilled by an Armstrong/Repsol JV in 2017. Of this resource, 126MMbbls will be net to Red Emperor, and 144MMbls will be net to 88 Energy.
The first stage, however, will be ensuring this oil can, in fact, be taken out of the ground. The prospect has a geological chance of success of 25pc-35pc
Author: Daniel Flynn
Disclaimer: The author does not own shares in either of the companies mentioned in this article