88 Energy Limited (ASX:88E) Announces Farm-out Agreement for Project Phoenix
Transaction Details
88 Energy Limited (ASX:88E) has entered into a Farmout Participation Agreement with Burgundy Xploration LLC for Project Phoenix on Alaska’s North Slope. Under the agreement, Burgundy will fund up to US$39 million (approx. A$60 million) of the project’s future work programme. The deal is structured in two phases, with Phase 1 covering US$29 million (A$45 million) for the 2025/26 work programme, including a horizontal well and flow test. Upon successful completion of Phase 1, Burgundy may fund an additional US$10 million (A$15 million) in Phase 2, potentially increasing their working interest to 75%.
Strategic Impact
The Farmout Agreement de-risks Project Phoenix and provides a clear funding pathway towards a final development decision. This transaction represents a significant uplift of approximately 50% on 88 Energy’s invested capital since mid-2022. With Burgundy assuming operational control, 88 Energy will focus on advancing Project Leonis, enhancing shareholder value through strategic asset management.
Executive Comments
Managing Director Ashley Gilbert stated, “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. 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.”
Motley Fool contributor Abbie Stokes has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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