88 Energy Ltd and its exploration partner, Burgundy Xploration, have agreed a new farm-out deal for the Project Phoenix horizontal test well, on Alaska’s North Slope.
Burgundy will fund up to $39 million of future work costs in return for up to a 50% working interest in the project.
In Phase 1, Burgundy will invest $29 million in the 2025/2026 campaign which will include a horizontal well and production test. At this point, 88 Energy’s working interest in the project will reduce from 75% to 35%.
In Phase 2, Burgundy has the option to invest a further $10 million for an additional well or on alternative programmes, and, 88 Energy’s working interest will reduce to 25%.
Under the deal, Burgundy will become the project operator for Phoenix.
88 Energy managing director Ashley Gilbert said he was ‘delighted’ and called the agreement ‘mutually beneficial’.
“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,” Gilbert said in a statement.
He added: “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.
“To have achieved a work-programme carry in just two years of exploration and advancement since the drilling of Hickory-1, underscores the implied value of the asset and serves as a blueprint for our strategy moving forward.”
