88 Energy provides an update related to the purchase of the Umiat Oil Field, located on the North Slope of Alaska. 

Umiat Oil Field Purchase

On 8th January, 88 Energy, via its wholly owned subsidiary Emerald House LLC, entered into a Sale and Purchase Agreement with Malamute Energy, Inc and Renaissance Umiat LLC (Sellers) to acquire the Umiat Oil Field. The consideration for the purchase was a 4% ORRI and assumption of the liability for the abandonment of the Umiat-18 and Umiat-23H wells, drilled by Linc Energy in 2013/2014. The estimated cost to abandon the two wells is approximately US$1m.

The Umiat Oil Field is covered by two leases comprising 17,633 acres, which are in a unit that was formed in September 2019 with an initial 10 year term. The current conditions of the unit stipulate a well commitment (exploration or appraisal) by 31st August 2022.

Umiat was discovered in the mid-1940s with 11 appraisal wells drilled by 1953, several of which were tested. Umiat-5 flowed 268 barrels per day on a 3 month test and Umiat-8 had a peak flow rate of 5.9mmcf/d of natural gas during a 4 day test. Little work was done until 2013/2014 when Linc Energy drilled two wells, Umiat-18 and Umiat-23H. Umiat-23H was tested with a maximum flow rate of 800 barrels per day and sustained flow of 200 barrels per day.

Substantial engineering and environmental work was also done by Linc Energy in support of a potential future development. One of the routes for access to infrastructure runs directly through 88 Energy’s Project Icewine leasehold where there are significant independently estimated resources of oil and gas. 88 Energy will now undertake a full field review to determine at what oil price Umiat may be commercial as a stand-alone development and whether optimisation of the previous development plan is possible. In the event of a discovery at Project Peregrine, where drilling is imminent, it is expected that Umiat would contribute significant value to any development.

Managing Director of 88 Energy, Dave Wall, stated: 
"Our operational activity at Project Peregrine has provided 88E with a unique position from which to acquire the Umiat Oil Field at an opportunistic price point. The asset has potential to add significant value for shareholders, possibly as a standalone development but certainly in the event that there is a material discovery in the imminent Project Peregrine drilling program.”

KeyFacts Energy: 88 Energy US Alaska country profile