Kevin Frank, a geologist and section chief of the state Division of Oil and Gas resource evaluation team, agreed.

In an April 7 interview with PN, Frank described the results that Erik Opstad and his team at the well site did get as encouraging.

Franks reaction was similar to what ConocoPhillips said after it drilled its recent Harpoon well. It was P&Ad and declared a dry hole, but the company has no intention of abandoning the promising prospect and plans to go back in to drill Harpoon in the future.

I think they (88 Energy) have done a good job, Frank said, following a lengthy meeting with members of the divisions resource evaluation team. Theyve collected well information from targets in the Nanushuk, which is the hottest oil play on the North Slope because of Pikka, Willow and other recent substantial discoveries.

They have reported shows, as described in their April 6 operations update, including evidence of oil in the cuttings that were brought to the surface while drilling. One of the characteristics of the oil in the cuttings is that oil fluoresces under UV light. They saw this, Frank said.

88 Energy conducted logging while drilling, or LWD and were encouraged by what they saw in multiple intervals. Additional data was collected via wireline run collecting a triple combo logging suite with the addition of a nuclear magnetic resonance, NMR, tool, he said.

The triple combo measures gamma-ray, resistivity and density of the formation while the NMR provides an estimate of the mobility of the fluid present. In aggregate this data can be interpreted to gain insight into the clay/sand content, fluid type, porosity of the rock and mobility of the fluid in the rock, Frank said.

That was 88 Energys first run on wireline.

The second run, he said, sounds like a downhole sampler to take fluid samples. After setting the tool, fluid is run through an optical fingerprint sensor to evaluate the fluid prior to opening the sample chamber. This allows fluids that were introduced by the drilling process to clean up prior to taking a sample that is more representative of the reservoir fluid, he said.

They had troubles with the tool because of a power problem and so did not get a fluid sample, Frank said and so did 88 Energys April 6 update, which popped in Alaska on April 5 but was dated April 6 because it came from Australia.

Getting a representative sample would have been nice. Unfortunately, they were unable to get that, Frank said.

After remedying the power problem, they made a second attempt but due to deteriorating hole conditions, the tool got stuck. They were able to pull the tool free, Frank continued.

They then made the decision that it was too risky so made a decision to call it a season and come back in the future to try again after the hole has been cleaned up. Given the late point in the season it sounds like they decided to demob before their snow road deteriorated. It makes complete sense to not risk stranding equipment on the tundra, Frank said.

When asked if these situations are common, he replied, Yes, very common on the North Slope when youve got projects working off of snow and ice roads and pads.

Operators, Frank said, try to prioritize by getting the most meaningful information first.

Did 88 Energy do that? Yes, I would say so. They were subject to time restraints. Adjustments and contingencies are to be expected, he said, adding youd hate to get your data but end up stranding your rig or other equipment out there until the next winter drilling season began - and having to pay rental rates for it the entire time.

One point they make is that they did not get a chance to evaluate the two most prospective intervals they saw on their logs - so they have a strong impetus to return for farther evaluation in the future, he said.

They found something they had not anticipated - a new prospective horizon in the Nanushuk formation that was not one of their pre-drill targets. Its always nice to find something you hadnt expected, Frank pointed out.

Was what 88 Energy did find promising? There is still uncertainty, but they have reduced it by getting some positive signs, he said.

I think it is encouraging - what they did get, Frank said.

His comments were endorsed by his boss, Division of Oil and Gas Director Tom Stokes: 88 Energy has actively explored the North Slope for many years. It is encouraging to see the results they achieved during this winters drilling activities, he told PN April 7.

The Reddit crowd

Until first quarter 2020, penny stocks were viewed by most investors as high risk.

But the pandemic triggered a flight from stocks into cash, and penny stocks became popular.

In the April 6 edition of Investor Place, contributor Robert Lakin warned that a penny stock favorite of the Reddit trading crowd raised some questions about 88 Energys Merlin 1 drilling results.

Watch for shares of 88 Energy Limited (OTCMKTS: EEENF) to tank this morning, as they follow the more-than-65% drops of the London and Sydney-listed shares of the Australian oil explorer.

Whats behind the expectations for EEENF stock today? wrote Lakin.

It wasnt the good news part of its earlier update on its Peregrine project in Alaska ... Last week the company announced it had detected potential hydrocarbon-bearing zones while conducting drilling operations for Peregrine.

Instead, Lakin wrote, its likely the bad news of this mornings update from 88 Energy managing director Dave Wall.

Wall revealed a power outage due to equipment failure and other issues, preventing the company from sampling its two highest-prospective zones. As well, further drilling may be required to confirm a discovery, Lakin noted.

Popular with penny stock investors, EEENF stock was discovered in the Reddit zone, he wrote, adding, 88 Energy has been one of the most buzzworthy Reddit penny stocks. Recent posts on the eponymous subreddit include claims that shares are lottery tickets and takeover rumors.

But the most recent buzz from the Reddit crowd is less positive, he said, which appears to be part of the reason for the major sell-off of 88 Energys shares and its plummet in price after its latest operations update on Merlin 1.

At one point the shares were at 33 cents, but more recently they were trading on ASX at 2.4 cents.

Lakin is described on Investor Place as a veteran financial writer and editor, following fintech, agtech and property tech startups. He said he did not hold any 88 Energy shares at the time he filed the article.

Much to applaud

The company also was pleased about finding a new prospective horizon in the Nanushuk formation that may all be within its Peregrine acreage and was not one of the pre-drill targets in Merlin 1.

One solid PN source said he understood the new interval might be 1,000 feet thick. No corroboration was provided by 88 Energy on April 6.

But Wall did say: Particularly encouraging is the apparent presence of oil in a zone that has not previously been targeted in NPR-A. Whilst the potential volumetric size of this zone is not yet known - as it was not a mapped target in Merlin-1 - the formation could be extensive based on initial interpretation.

The other most prospective zone with good shows and petrophysical characteristics is shared with the Harrier Prospect and will likely high grade that for drilling in 2022, 88 Energy reported.

In closing, as one PN source described Merlin 1 results: If it walks like a duck, quacks like a duck, and swims like a duck, well.