Shares in 88 Energy (LON:88E) have suffered a hefty drop on London’s junior market today as the AIM-listed company updated investors on its ongoing flow testing, noting that a decision about the Icewine-2 well in Alaska will be made within the next couple of weeks. Today’s drop comes after the stock came under pressure last week after initial results from the well disappointed investors.
As of 13:54 BST, 88e’s share price had given up 6.55 percent to stand at 4.90p. The shares have lost just under 15 percent of their value over the past year, and are down by nearly 30 percent in the year-to-date.
88 Energy announced in a statement today that frac fluid continued to flow back from the Icewine-2 well located onshore North Slope of Alaska, with hydrocarbons flowing now too. The company noted that the current flowback procedure remained at an early stage, while the gas observed so far was not considered representative of the potential rate or composition of hydrocarbon in the reservoir. The Australia-based energy group noted that it was “interpreted that additional frac fluid needs to be removed in order to achieve a representative result”.
“A decision will be made on the most appropriate strategy to accomplish this within the next two weeks,” 88 Energy added.
Today’s update comes after the well was shut in July to allow for imbibition and pressure build up to occur within the HRZ shale. Last week, however, the company said that initial results after the flow testing was restarted indicated that hydrocarbon indications had been minor and were associated only with the formation of gas hydrates in the choke manifold.
The flow testing results are seen as pivotal for the group’s plans to develop the HRZ shale, with the Icewine-2 appraisal well designed to confirm the geological findings of the first hole, which had pointed to the presence of hydrocarbon bearing HRZ shale.