88 Energy’s (88E.L, ASX:88E) share price nosedived last night in Australia and today in London after the company announced it would go ahead with a six week shut-in at the Icewine well. According to the company, after having analyzed and compared the current well performance to other shale plays, it has decided to shut the well in for a period of six weeks to allow a soaking process to start.
This ‘soaking’ should result in building up additional pressure at the well as the frac fluid will be absorbed, displacing the water that might be blocking the hydrocarbon molecules.
Whilst not unexpected (the company has been hinting at a potential shut-in for several weeks now), it’s obviously not the best news to start this week. Whilst the stimulation fluid continues to flow back in a natural way and whilst 16% of the stimulation fluid has been recovered, 88E thinks shutting the well is the best decision for now, and its shareholders will have to remain patient for at least an additional six weeks. The capitulation on the markets is understandable as investors were hoping for definitive results by now, and every delay is seen as a disappointment.