On Monday, 88E revealed its logging-while-drilling data showed "multiple potentially hydrocarbon-bearing zones" within its Merlin-1 well.
Merlin-1 is targeting a 645 million barrel of oil gross prospective resource. Managing director David Wall has been bullish that success at Merlin-1 could yield about 300 million barrels of oil net to 88E.
Oil shows were recorded over multiple intervals in the Nanushuk formation - across all primary targets. One prospect also showed "substantially elevated" gas peaks.
88E will now run wireline logs over the coming days to determine whether the find is a commercial discovery of oil and whether resources are mobile.
"Whilst there is still work to do to confirm a discovery, the results to date are encouraging and we look forward to providing an additional update on the wireline program in seven to 10 days," Wall said.
The well is the first to be drilled at 88E's Project Peregrine which was first acquired by the company in 2020 via a takeover of XCD Energy.
88E subsequently farmed-down a 50% interest to Alaska Peregrine Development Company and is being carried for Merlin-1.
Data from the well is also expected to de-risk the Umiat oil field which lies adjacent to Project Peregrine. Unlike Merlin-1, 88E holds a 100% interest in Umiat.
Unsurprisingly, 88 Energy's share price rocketed as much as 12% in morning trade to 3.4 cents, giving the company a market cap worth $388 million.