Australian resource up-and-comer Red Emperor Resources NL [ASX:RMP] has today recovered 37.3% after dipping to 43 cents a share yesterday .
At time of writing, the price sits at 59 cents a share.
The natural resource miner has two significant oil and gas operations in the Alaskan North Slope and in South East Asia.
Alaskan drilling program fast-tracked
Red Emperor yesterday released their interim results from the ‘Winx-1’ oil exploration well, in which the company has a major stake. The operation has so far revealed a ‘weak to moderate’ oil showing:
‘Preliminary review of the interval by the operator suggests that the zone in which the shows were encountered is at the lower end of the range required for commerciality; however, further petrophysical analysis is necessary.’
The group operator, 88 Energy Ltd [ASX:88E], advised that the Winx-1 operation also intersected with an area of interest the Nanachuk region (between 4,460ft and 4,530ft). However, no oil shows were found in the secondary target drill zone (Seabee turbitites, at around 4,272ft), with no concrete evidence of hydrocarbon saturation.
The Winx-1 area is similar to the successful Horseshoe exploration well found in 2017, which is located just six kilometres west of Winx-1 in the Western Blocks region.
Like 88 Energy, Red Emperor is remaining quietly confident, with the addendum that ‘further exploration, appraisal and evaluation’ will be required for Winx-1 and the surrounding zones. However they have given no specific timeframe for this.
The target estimate for Winx-1 is 400 million barrels of oil.
Future forward for Red Emperor
Despite the predicted geological chance of success coming in at a range of 25-30% — no doubt far short of the result Red Emperor would have liked — the share price has pushed forward since approvals for drilling were given in early 2019.
And operations in Alaska are not the only program up Red Emperor’s sleeve; they also have a highly prospective stake in the ‘Cinco’ gas prospect in the Philippines, which is estimated to cover a deep-water block of 1.6 trillion cubic ft.
Given the sheer scale and size of these developments — and the money raised to make them a reality — investors will likely be holding on for more confident updates. In the meantime though, the additional drilling operations in the US could be enough to make them a much bigger prospect.
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