Two days ago it was all fear amid speculation of a dry hole, today Alaskan oil driller 88Energy (ASX:88E) is riding a wave of optimism after issuing a much more positive piece of news for its Winx-1 well.

The driller said the well hit all of their pre-planned targets and identified multiple locations where oil and gas may be, including in the primary Nanushuk zone.

They still have to run tests on the well to see what is actually there.

88Energy stock ran up by 50 per cent to 2.4c, before sliding back.

“Encouragingly, we have also encountered multiple potential pay zones in the primary target as well as one of the secondary targets. Whilst it is still early days, we are well placed and look to the wireline program with measured optimism,” said 88Energy managing director Dave Wall.

Now why’d you have to tell us that?

The well reached a depth of 6800 feet (2072.64 metres), but investors had been rattled earlier this week.

On March 4, 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.

Co-owner Otto Energy (ASX:OEL) saw its positive half year report that came out the same day overlooked, with its stock dropping as low as 11 per cent to 5.7c before recovering.

Co-owner Red Emperor (ASX:RMP) saw its stock drop to an 11-month low of 4.3c. Today they rose as high as 11c, an intraday bounce of 93 per cent.

Today the news was, clearly, more acceptable to investors.

Expectation management

88Energy has not engaged in much expectation management in the lead up to drilling well, comparing it to the nearby Horseshoe-1/1A well that “significantly extended the highly successful Nanushuk topset play”.

The Winx-1 well is 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.