88 Energy Limited announced that the Merlin-2 wireline logging program is nearing completion with the final run in progress. The wireline program was designed to evaluate and quantify the reservoir potential associated with the oil shows and elevated mud gas readings noted across the target zones in the LWD data. The primary objective of the Merlin-2 well was to collect hydrocarbon samples from the target zones.

Unfortunately, this was unable to be achieved using Schlumberger's MDT (Modular-Formation Dynamics Testing) tool due to the tightness of the formation at this location. Whilst observations of LWD logs and drill cuttings collected throughout the Merlin-2 drilling operations revealed target intervals are thicker than those encountered in Merlin-1, and preliminary analysis of the LWD data indicated sufficient permeability /porosity to obtain a hydrocarbon sample, results from the wireline program have demonstrated target zones to have lower than anticipated porosity /permeability resulting in difficulty obtaining fluid samples of any significance. The results of Merlin-2 are largely consistent with the initial Merlin-1 exploration well drilled in Project Peregrine in 2021, with strong fluorescence, oil sheen, petroliferous odour and cut noted in the drilling cuttings, elevated C2-C5 mud gas readings over the target zones with total gas significantly above background gas readings and also evidence from the reservoir sampling tool of movable hydrocarbons.

The pre-drill expectation from depositional modelling and nearby analogues was that superior thickness and reservoir quality would be encountered to the east of Merlin-1. Whilst thicker target intervals were noted at Merlin-2, the porosity /permeability appear to be largely consistent with those observed at Merlin-1. Both Merlin wells were drilled on sparse, vintage 2D seismic data, which provides a narrow field of view of the reservoir and limited optionality on drilling locations. 88 Energy will now assess the merits of a future 3D seismic acquisition program to better identify with modern processing of data future drilling locations to optimally test and determine the potential commerciality of the Peregrine acreage. Forward operations for the Merlin-2 well will now focus on plugging and abandoning the well and commencing demobilisation from the drilling location.

88 Energy will undertake a detailed evaluation of all the data obtained from the Merlin-2 drilling program and evaluate the potential future appraisal activities within the Project Peregrine acreage, which includes additional independent drilling locations such as the Harrier-1 prospect to test the N-14 and N-15.