88 Energy Secures Funding for Project Phoenix Horizontal Test Well
Why we think this is good
The farm-out agreement with Burgundy Xploration provides a clear funding pathway to advance the Project Phoenix asset towards production testing and a final development decision. This is a positive step that de-risks 88 Energy's financial position and allows the company to focus on its other key asset, Project Leonis.
Key Points
- 88 Energy has entered into a farm-out agreement with Burgundy Xploration LLC for its Project Phoenix asset on the Alaskan North Slope
- Burgundy will fully fund up to US$39 million (A$60 million) of the total future work program costs in exchange for up to an additional 50% working interest
- The farm-out is structured in two phases, with Burgundy initially funding US$29 million (A$45 million) for the CY25/26 work program, including a horizontal well and extended flow test
- Upon successful completion of Phase 1, Burgundy may earn an additional 10% working interest by funding up to US$10 million (A$15 million) for further development
- The agreement allows 88 Energy to focus on the advancement of its other key asset, Project Leonis
Summary
88 Energy Limited has entered into a farm-out agreement with Burgundy Xploration LLC to advance its Project Phoenix asset on the Alaskan North Slope. Under the agreement, Burgundy will fully fund up to US$39 million (A$60 million) of the total future work program costs in exchange for up to an additional 50% working interest in the project. This provides a clear funding pathway to progress the asset towards production testing and a final development decision. The farm-out is structured in two phases, with Burgundy initially funding US$29 million (A$45 million) for the CY25/26 work program, including the drilling of a horizontal well and an extended flow test. Upon successful completion of Phase 1, Burgundy may earn an additional 10% working interest by funding up to US$10 million (A$15 million) for further development. The agreement allows 88 Energy to focus on the advancement of its other key asset, Project Leonis.