88 Energy (ASX:88E) and Red Sky Energy (ASX:ROG) shares rose this morning
88 Energy and Red Sky Energy shares rise after they excite their investors again
Energy
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The small cap oil and gas sector has had a bumper year but Red Sky Energy (ASX:ROG) and 88 Energy (ASX:88E) have done particularly well.
Since oil prices bottomed out last year, the sector has been on the rebound and Red Sky and 88 Energy rose 680% and 480% in FY21.
But both companies had individual catalysts.
Other good news for the company included receiving approval from the South Australian government to start production.
As for 88 Energy, it has a project in Alaska (the Umiat oil field) and has impressed investors with its regular updates – despite some setbacks last Easter.
Today’s update from the latter company was another hint at potential pay dirt.
The company conducted further studies in conjunction with post well testing at its Merlin-1 well and says that additional upside has been identified at Umiat.
“Preliminary pressure analysis suggests there is potential for bypassed pay in the footwall of the Umiat structure,” it said.
“The Umiat footwall has only been penetrated by one well, which was drilled in 1952 with a crude logging and testing program.
“Seismic attribute analysis suggests there is potential for additional reservoir sands in the footwall of the Umiat structure.”
88 Energy also announced it was continuing to consider its development options and it managed to defer its well commitments by 24 months. The company says the latter move will help it plan a program that will maximise the success of Umiat.
Shares in 88 Energy rose over 20% this morning.
88 Energy (ASX:88E) share price chart
Red Sky rises too
Red Sky Energy meanwhile told shareholders it had successfully completed testing of the rods, which lift oil to the surface, at its Killanoola oil project.
The rods were checked to ensure they were free moving and were declared fit for purpose.
The company says its next steps are to carry out a short test run to ensure the rods work and then re-enter the well to perforate its newly identified net pay.
Success should increase production rates significantly with planning and preparation has commenced for an extended production period.
Red Sky Energy shares rose along with 88 Energy but only by 10%.
