A small Australian explorer is reporting mixed initial results from an exploration well drilled last month in an area south of the largest North Slope oil fields.

Leaders of 88 Energy announced April 7 that the Charlie-1 well hit a large pool of natural gas condensates in the Torok sand formation but did not hit the concentrations of oil they were hoping for.

The Charlie-1 well was drilled roughly 30 miles west of the Dalton Highway and about 35 miles south of Prudhoe Bay. It is a western step-out from 88 Energy's Icewine oil project centered on a drilling pad near the Dalton.

88 Energy is the operator of nearly 480,000 acres of continuous leases that run east-west along the southern North Slope and are bisected by the haul road and Trans-Alaska Pipeline. The company works in Alaska under its wholly owned subsidiary Accumulate Energy Alaska.

The Charlie-1 well targeted conventional oil prospects in the Brookian geologic sequence largely based off of data from the nearby Malguk-1 well drilled by BP in 1991.

88 Energy Managing Director David Wall said in a statement that samples of the gas condensates will be analyzed for commercial viability over the coming months.

"On the one hand, we have confirmed the presence of mobile hydrocarbons in the primary targets of the well, but, at the same time, there are challenges that need to be more fully understood related to whether these can be commercialized on the North Slope," Wall said.

Condensate samples were taken from the Torok formation — a subset of the Brookian sequence — at approximately 10,500 feet and 10,650 feet, according to the April 7 statement.

Wall added that shallower targets were found to hold water and not have proper sand accumulations.

The total project was expected cost approximately $23 million, according to estimates made prior to drilling.

88 Energy is one of several small independent companies exploring areas south of Deadhorse primarily for Brookian oil targets. 88 Energy's prior Icewine drilling was focused on shale zones along the Dalton highway.

While 88 Energy is the primary operator over the broader Icewine acreage, Charlie-1 drilling was farmed out to London-based Premier Oil for a 60 percent stake in roughly 57,000 acres of leases. However, Premier intends to withdraw from the project because the results did not meet the company's expectations, 88 Energy officials said in the April 7 project statement.

The Charlie-1 well is going to be plugged and abandoned rather than suspended or tested further because additional work this late in the season could result in stranding the Nordic-Calista No. 3 rig used to drill the well at the site if ice road conditions deteriorate and returning to plug the well later if the project is not deemed viable would add further costs, according to 88 Energy. Company officials also noted that personnel needed to conduct future work could be unavailable in the coming months due to the COVID-19 pandemic.