Australia-based oil and gas company 88 Energy, through its fully-owned subsidiary Emerald House, has agreed to acquire the Umiat oil field located in North Slope Borough, Alaska, US, from Malamute Energy, and Renaissance Umiat.
As per the acquisition terms, the consideration includes a 4% overriding royalty interest (ORRI) as well as assumption of the $1m in liability for abandoning the Umiat-18 and Umiat-23H wells, which were drilled by Linc Energy in 2013/2014.
The Umiat oil field, which is covered by two leases consisting of 17,633 acres, was discovered in the mid-1940s with 11 appraisal wells drilled by 1953.
Of these drilled wells, the Umiat-5 well flowed 268 barrels per day during a three month test while the Umiat-8 well reported a peak flow rate of 5.9mmcf/d of natural gas during a four-day test.
However, the partners carried out little work until 2013/2014 when Linc Energy drilled two wells – Umiat-18 and Umiat-23H, which was tested and showed sustained flow of 200 barrels per day.
88 Energy to undertake complete Umiat oil field review
88 Energy plans to undertake a complete field review to assess oil price at which Umiat may be commercial as a stand-alone development. It also intends to optimise the earlier development plan is feasible.
88 Energy managing director Dave Wall said: “Our operational activity at Project Peregrine has provided 88E with a unique position from which to acquire the Umiat Oil Field at an opportunistic price point.
“The asset has potential to add significant value for shareholders, possibly as a standalone development but certainly in the event that there is a material discovery in the imminent Project Peregrine drilling programme.”
Last month, 88 Energy signed a rig contract with All American Oilfield for its Project Peregrine in the NPR-A region of the North Slope of Alaska.
