The 88 Energy Ltd (ASX: 88E) share price is on the move today after the company announced an operations update. During mid-afternoon trade, the energy exploration company's shares are swapping hands for 3.5 cents, up 12.9%.
Let's take a close look and see what 88 Energy updated the ASX with.
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What did 88 Energy announce?
Investors are pushing the 88 Energy share price higher after positively receiving the company's latest news.
In its announcement, 88 Energy advised it has detected potential hydrocarbon-bearing zones whilst conducting drilling operations at its Merlin-1 well. The site is located within the company's Project Peregrine in the northern area of the National Petroleum Reserve, Alaska (NPR-A).
88 Energy revealed that the Nanushuk Formation, which consists of the primary targets for the Merlin-1 well, was found to be roughly 600 feet low to prognosis. In addition, it is estimated to be around 500 feet thicker than that encountered in the Willow Oil Field, north of the Project Peregrine.
The drilling data highlighted that the gamma log indicates the presence of more sand packages than in the Willow Oil Fields. Furthermore, it stated that sand packages in the Merlin-1 well are generally cleaner in nature. However, the reservoir quality is expected to be known when the wireline logging is complete.
The company said that oil shows were recorded over multiple intervals n the Nanushuk while drilling Merlin-1. It also observed relatively weak to moderate 'dry' fluorescence with slow-to-moderate and sometimes fast streaming cut when exposed to solvent.
Mud gas peaks were documented, but of not the same scale as in the Willow Oil Fields. One of the prospective targets in the Merlin-1 well however did record elevated total gas. Heavier gas components, including C5, was observed over multiple intervals. Fluorescence was observed in the drilling mud.
Whilst the results are encouraging, 88 Energy will complete the wireline program over the next week to confirm the hydrocarbon find.
Management commentary
88 Energy managing director Dave Wall briefly touched on the initial results, saying: "Whilst there is still work to do to confirm a discovery, the results to date are encouraging and we look forward to providing an additional update on the wireline program in 7 to 10 days."
About the 88 Energy share price
Over the past 12 months, the 88 Energy share price has jumped over 100%, with year-to-date, rising above 300%.
On valuation grounds, 88 Energy commands a market capitalisation of around $425.7 million, with a mammoth 12.5 billion shares outstanding.
