The energy company updated the market on its Umiat oil field in the US state of Alaska.
The post Why the 88 Energy (ASX:88E) share price is rocketing today appeared first on The Motley Fool Australia. –
The 88 Energy Ltd (ASX: 88E) share price is rocketing today, up 11% to 5 cents apiece in late morning trade, having earlier posted gains of more than 20%.
Below we take a look at the ASX energy share’s latest oil field update.
What update did 88 Energy report?
The 88 Energy share price is soaring after the company updated the market on its Umiat oil field in the US state of Alaska.
According to the release, new studies conducted in conjunction with its Merlin-1 post well testing and analysis “have identified additional upside” at the Umiat oil field.
This comes after the oil field lease holder Emerald House, a wholly owned subsidiary of 88 Energy, received a data pack on the region that included the Umiat 3D seismic data. Before that, the company only had data interpreted from 2 seismic lines across the Umiat structure.
The 88 Energy share price may also be getting lifts after it reported that Emerald House had received approval from the US Bureau of Land Management (BLM) to defer its Umiat Year 2 Unit well commitment by 24 months. That commitment has now been pushed back to 31 August 2023.
The company said the extra time would enable it to optimise its plan for full field development. That includes looking into potential synergies with the Project Peregrine plans.
It also needs extra time to review the “extensive amount of historical data” it received from the sellers of the Umiat oil field. Potential development cost savings have been identified in studies already underway reviewing historical Umiat development plans.
88 Energy entered into an agreement to acquire the Umiat oil field on 8 January 2021 via its wholly owned subsidiary Emerald House. According to the company:
Umiat is a known oil field of high quality (38-degree API) crude at shallow depth. It is covered by two leases comprising 17,633 acres, which are in a unit that was formed in September 2019 with an initial 10-year term.
88 Energy share price snapshot
The 88 Energy share price has been on a tear this year, up an eye-popping 400% since March 2021. By comparison the All Ordinaries Index (ASX: XAO) has gained 26% over that same time.
Should you invest $1,000 in 88 Energy right now?
Before you consider 88 Energy, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and 88 Energy wasn’t one of them.
The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
*Returns as of May 24th 2021
Here’s why the Boral (ASX:BLD) share price is falling today
Why the EcoGraf (ASX:EGR) share price is up 11% on Wednesday
Should you buy ANZ (ASX:ANZ) shares in August 2021 for the dividend yield?
Splitit (ASX:SPT) share price surges 20% on Wednesday
Air New Zealand (ASX:AIZ) share price flat despite earnings downgrade
The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.