88 Energy inks farm-out deal for Project Phoenix
By Josh White
Date: Monday 17 Feb 2025
(Sharecast News) - 88 Energy announced on Monday that it has entered into a farm-out agreement with Burgundy Xploration for its Project Phoenix asset on the North Slope of Alaska, securing full funding for the upcoming horizontal test well and extended flow test scheduled for the first half of 2026.
The AIM-traded firm said that under the agreement, Burgundy would fund up to $39m in total project costs in exchange for up to an additional 50% working interest.
In the first phase, Burgundy would provide $29m to cover all costs for drilling and production testing, leaving 88 Energy with a 35% working interest post-farm-out.
A second phase, contingent on successful initial results, would see Burgundy fund up to an additional $10m, further reducing 88 Energy's stake to 25%.
Following completion of the transaction, Burgundy would assume operatorship of Project Phoenix, allowing 88 Energy to focus on advancing its Project Leonis asset.
The board said the agreement remained subject to customary conditions, including Burgundy securing necessary capital during 2025.
"We are delighted to announce that we have reached a mutually beneficial agreement with our long-term joint venture partner, Burgundy, to advance Project Phoenix towards future production," said managing director Ashley Gilbert.
"Burgundy's commitment to the project recognises 88 Energy's accomplishments since 2022 and value added to the acreage during this time, as well as validation of the broader region and the opportunity presented on the Alaskan North Slope.
"Today's announcement crystalises a funding pathway for the asset, enabling critical production testing at the Hickory-1 multi reservoir discovery - a key step in proving the project's economics and potential future commerciality."
Gilbert said that to have achieved a work programme carry in two years of exploration and advancement since the drilling of Hickory-1 underscored the implied value of the asset, and served as a blueprint for 88's strategy moving forward.
"We look forward to our continued work with Burgundy as they progress towards assuming operatorship of the project ahead of the scheduled 2026 drilling programme."
At 1149 GMT, shares in 88 Energy were down 3.03% at 0.08p.
Reporting by Josh White for Sharecast.com.
Email this article to a friend
or share it with one of these popular networks:
You are here: news
10 Lower Thames St,
London EC3R 6EN