The Alaskan North Slope is the location for the Project Phoenix in which 88 Energy (LON:88E) has a 75.2% working interest.

The group’s Hickory-1 has up to six conventional reservoir targets that are expected to be appraised.

In an Operations Update just issued by the company it has declared that Hickory-1 successfully intersected and drilled the SMV-A, B and C reservoirs.

Oil shows have been noted by the initial interpretation of logging-while-drilling data, which also showed elevated mud gas readings, high resistivity signatures and crossover of neutron density curves indicating potential hydrocarbon pay.

The current depth of the Hickory-1 exploration well is over 8,820 feet.

The work is ongoing and will take another 3-5 days, with a Target Depth of 11,000 feet.

Project Phoenix

Project Phoenix is located on the central North Slope of Alaska and encompasses approximately 82,846 gross acres.

It is situated on-trend to recent discoveries by Pantheon Resources Plc (LSE: PANR) in multiple, newly successful play types across top, slope and bottom-set sands of the Mid Schrader Bluff, Canning and Seabee Formations.

Independent mapping has demonstrated that these plays extend into the Phoenix acreage.

Project Phoenix holds an estimated unrisked conventional total of 647MMbbl of prospective oil resources (mean unrisked, net to 88E), independently assessed by Lee Keeling and Associates in Q3 2022.

The acreage has been significantly de-risked by the recent Pantheon drilling and flow tests on their adjacent acreage to the North, coupled with data from Icewine-1 well logs (encountered 380 ft of net oil pay within SMD sands) and a modern 3D seismic data set (FB3D).

Analyst Opinion

James Mccormack at Cenkos Securities noted that the £125m capitalised group had a A$17.5m Placing in February, which leaves it able to cover its required working capital and overheads for the year ahead.

He rates the group’s shares, currently 0.52p, as a Buy.

The FTSE 100 had a roaring start to Tuesday’s session following comments by Bank of England Governor Andrew Bailey suggesting rates hikes could soon come to an end, and said the current banking crisis was not like the 2008 financial crisis.

The FTSE 100 traded as high as 7,520 in early trade on Tuesday, but fell back to trade dead flat by midday.

Early optimism saw another jump in banking shares. Barclays traded above 140p before falling back to trade negatively, Natwest shares also gave up all of their early gains.

“It’s all about confidence right now – and anything which reassures shareholders, creditors and depositors that their money is safe with the banks is one step further away from the carnage which claimed SVB and Credit Suisse,” said AJ Bell investment director Russ Mould.

The confidence Mould alludes to appears to be fragile. Traders selling early strength suggests markets are conscious the current crisis is not yet completely over.

Diageo CEO steps down

After a 10-year stint as CEO of Diageo, Sir Ivan Menezes will step down and be replaced by Debra Crew. Diageo shares fell on Tuesday.

“The market reaction, with a mere 0.5% decline in the share price, shows that investors aren’t worried about big changes to the business. Instead, this looks like as smooth a transition as an athlete passing the baton in a sprint relay,” said Russ Mould.

Analysts highlighted the precarious role for the new CEO with Diageo shares trading above 20x earnings.

“Growth is expected to slow in the short-term however, and an earnings multiple of about 20x means Debra Crew will be under extra pressure to perform,” commented Derren Nathan, Head of Equity Research at Hargreaves Lansdown.

Ocado

Ocado shares were the FTSE 100’s top faller after the company released an update on their Ocado retail partnership with Marks & Spencer. Revenue, customer numbers and orders per week were all higher, but investors were apparently unhappy with the lower average basket size and shares fell over 5%.

“Ocado’s retail arm is in a difficult position. While the cost-of-living crisis rumbles on, being a more premium name in the sector comes with immediate challenges,” said Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown.

“However, the group seems to be doing well with the tools at its disposal. Although the number of items people are buying per-shop is dropping, which is to be expected as post-Covid shopping habits normalise, this is being successfully offset by higher prices.”

Diageo shares slipped on Tuesday after the global drinks giant announced CEO Sir Ivan Menezes will step down and replaced by Debra Crew.

Sir Ivan Menezes has been in charge of Diageo since July 2013 and shareholder disappointment on Tuesday is understandable.

During his tenure, the Diageo share price has nearly doubled and is firmly established as one of the world’s largest alcohol companies by market cap.

“A change at the top is always a leap into the unknown, although slightly less so when the incumbent is already part of the team. Diageo is the sixth largest company on the FTSE 100, and the new captain is unlikely to be given much of a honeymoon period by shareholders,” said Derren Nathan, Head of Equity Research at Hargreaves Lansdown.

“Sir Ivan will be a tough act to follow. Diageo now sells over 200 drinks brands across 180 markets, and is a category leader in many of its spirits categories. And on a fitting note for his departure, its flagship Guinness brand has become the number one beer sold in pubs in the UK.”

“Growth is expected to slow in the short-term however, and an earnings multiple of about 20x means Debra Crew will be under extra pressure to perform.”

Diageo shares are down 2.7% year-to-date and has a 2.1% yield.

The FTSE 100 gained on Monday after fears about the global financial system eased and investors stepped in to pick up beaten down stocks.

The FTSE 100 was nearly 1% higher at 7,476 at the time of writing, while the German DAX added 1.2%. A sharp rally in Deutsche Bank shares helped lift the mood in Europe.

“Bargain hunters were out in force for Europe’s banks following the chaos of the past few weeks. Deutsche Bank jumped more than 4% in early trading, regaining some of the territory lost last week when its share price plummeted,” said Russ Mould, investment director at AJ Bell.

Although Deutsche Bank shares found some support, the cost of insuring against the bank defaulting on their bonds still remained high. Deutsche Bank Credit Default Swaps (CDS) will be closely watched in the coming days and further increases could spark another wave of volatility.

In addition to stability in Deutsche Bank’s equity, news First Citizens Bank had acquired SVB assets instilled a sense the crisis was past its worst.

“Helping to repair sentiment towards the sector was the news that First Citizens Bank is to buy $72 billion of Silicon Valley Bank assets at a discount of $16.5 billion. Together with HSBC’s purchase of SVB’s UK operations and UBS’ takeover of Credit Suisse, investors will be hoping for some stability from now on in the broader sector,” said Russ Mould.

The positive developments at SVB and Deutsche Bank spilled over into the FTSE 100’s banks with Barclays, Natwest and Lloyds gaining on the day. Standard Chartered was still feeling the heat and trading in negative territory.

The gains elsewhere in the index were broad; 89 of the FTSE 100’s constituents were trading in positive territory at the time of writing.