88Energy’s (ASX:88E) much-anticipated Winx-1 oil and gas well in Alaska has turned out to be a dud.

Provisional results indicate there is not much oil in a section of the geology, the Nanushuk Topsets, which they’d suspected had the most potential.

The results showed the section was “not conducive to successfully flowing the formation”.

“Reservoir properties appear to be compromised by dispersed clay in the matrix at Winx-1,” 88Energy said.

The clay is present in other successful Nanushuk wells, but the way it’s been laid down in the Winx area makes it hard to get the oil out and also takes up more space, so there’s less oil to extract.

“This means that, whilst oil is present in the reservoir, there is less of it and it is not mobile.”

Data from another target zone showed low oil saturations.

“While the oil saturations are evidence of an active petroleum system and charge,” 88Energy said hopefully, “further work is required to determine whether there is an effective trapping mechanism at this location.”

Ouch

The news has decimated the share prices of the three companies which own stakes in the well.

88Energy, the operator, dropped as much as 48 per cent to 1.3c.

Red Emperor Resources (ASX:RMP) suffered the most with an 82 per cent plunge to 1.8c.

And Otto Energy (ASX:OEL), which told Stockhead last week Winx was a legacy asset and not core to their portfolio, was still punished by 17 per cent to touch a low of 5.4c.

You win some, you lose some

The Winx-1 well was drilled on the hunch that the area could be similar to the nearby Horseshoe-1/1A well that “significantly extended the highly successful Nanushuk topset play”.

88Energy had said the well was targeting a gross best estimate prospective oil resource of 400 million barrels of oil, including in the Nanushek formation.

A ‘resource’ is an initial, untested estimate of an oil or gas reservoir. Reserves are discoveries that are commercially recoverable.

The Winx-1 rollercoaster sank in early March when 88Energy said they’d only found “weak to moderate oil shows” between 4460 feet and 4530 feet, and nothing at a target at 4272 feet.

They also mentioned possible high water saturation, a problem if the driller has to separate the water from the oil for no financial benefit.

A few days later, news came that they’d hit the target depth of 6800 feet (2072.64 metres) and “encountered multiple potential pay zones in the primary target as well as one of the secondary targets”, raising expectations again.

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