GCI88 Energy reports progress at Project Phoenix, extends agreement with Burgundy Xploration
() , an Alaska-focused hydrocarbon explorer, issued an update on its flagship Project Phoenix on Alaska's North Slope.
88 Energy drilled the Hickory-1 discovery well at Phoenix in February 2023, which was flow tested during the Alaskan winter season in Q1/Q2 CY24. Two tests were conducted, one each for the Upper SFS and SMD-B reservoirs (see map below). The USFS reservoir produced at a peak flow rate of 70 bopd of light oil with c. 40-degree API oil gravity under natural flow; while the SMD-B reservoir registered a peak flow rate of 50 bopd of light oil with c. 39-degree API oil gravity under nitrogen lift.
Following the successful tests, pressured oil samples from both reservoirs were sent to a lab in Houston, TX for analysis, with results expected in Q3 CY24. The results will confirm reservoir fluid characteristics. Subsequently, an independent contingent resource assessment for the reservoirs is expected in Q4 CY24.
Separately, updated markets on progress made by its JV partner on the project, Burgundy Xploration, regarding its funding and listing plans. Texas-based Burgundy has invested over US$25m into Project Phoenix so far, and is planning a public listing to raise more capital for the project. Burgundy currently owes £3.5m in development funding to , with a negotiated deadline now extended until December 31, 2024.
Burgundy and are also in discussions about a deal whereby Burgundy would provide a carry to across an anticipated 2025/26 work program to include the drilling, completion, and extended flowtesting of a horizontal well on the Dalton Highway in return for additional working interest in the project.
View from Vox
continues to make good progress at Project Phoenix. The successful flowtest of the Hickory-1 discovery well was a major value inflection point for the project earlier this year, further bolstering its economics and delivery schedule.
The discovery well successfully flowtested 2 reservoirs - the USFS and SMD-B, producing peak flow rates of 70 bopd and 50 bopd respectively of light oil to surface. Impressively, USFS achieved oil to surface under natural flow. These results complement the deeper BFF reservoir's existing 250 mmboe contingent resource. In total, is targeting 647 mmboe of prospective oil resources at the site.
With both flowtests now complete, analysis is ongoing with results expected in Q3 2024, to feed into independent resource assessments for the two reservoirs by the end of CY24. The assessments, in combination with the post-flowtest analysis, will guide the next phase of Phoenix, including a potential horizontal well production test at the existing Franklin Bluffs gravel pad location.
Hickory-1 was a vertical well, designed for testing only. For production, long horizontal wells are planned, expected to deliver 6-12 times greater flow rates than what was observed during the flow tests.
has contracted ResFrac to review the Hickory-1 stimulation and flow design, and to model the production potential and optimise the development strategy for a horizontal well. Additionally, plans to initiate a formal farmout process to attract a partner for future drilling and development.
Project Phoenix is being jointly developed by 88 Energy and Burgundy Xploration. has a 75% stake in the acreage. Burgundy has committed to a £3.5m payment to by the end 2024 to cover its share of development costs. Burgundy's planned public listing and abovementioned discussions with for a horizontal well carry, are further positive developments.
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