Oil producer 88 Energy buys up more land in north Alaska

Oil producer 88 Energy has expanded its acreage in north Alaska by 25 per cent.

88 Energy (ASX:88E) operates Project Icewine, an area near Prudhoe Bay at the northern tip of the Trans-Alaska Pipeline.

The Prudhoe Bay oil field has given up 12 billion barrels of oil over 40 years, reshaping Alaska’s economy. Though production has declined in recent years.

88 Energy picked up an extra 458,097 acres in the area with its American joint venture partner Burgundy Xploration because it had potential as part of a shale play.

“The leasing strategy has been designed to strike a balance between this confidence and available capital while we build towards completion of the flowback and production testing of the Icewine#2 well in 1H 2018,” managing director Dave Wall told investors.

The Icewine#2 well is in the North Slope region of Northern Alaska. The company uses hydraulic fracturing — a method where water mixed with lubricants is sent down a well to force open cracks and fissures holding oil or gas.

It was closed up for winter in September “due to logistical reasons associated with ongoing testing in Arctic conditions”.

“The main issue is that of freezing of the borehole fluid, predominantly fresh water from the frac, over the 1300ft permafrost zone due to the low rates of fluid flow observed towards the end of the current test phase,” the company said at the time.

They’ll reopen in April or May next year.

88 Energy opened up 3 per cent at 1.8c on Wednesday morning.