88 Energy Limited (ASX:88E, AIM:88E, OTC:EEENF) (88 Energy or the Company) is pleased to advise that Burgundy Xploration LLC (Burgundy) has settled the residual balance, including interest and fees owed as part of the Hickory-1 flow test expenditure.
Highlights
- Final payment of US$2.2 million is in addition to the US$1 million received in February.
- Provides further balance sheet strength, with current cash position of over A$10 million2.
- Payment follows the Company’s execution of a Farmout Participation Agreement (PA) with Burgundy in relation to Project Phoenix in February 2025.
- PA provides for a full carry for costs associated with the upcoming horizontal well programme, including an extended flow test currently scheduled for mid-CY26.
- Contributes to the procurement of long-lead items for the planned CY26 horizontal drilling and production test programme
Background and Detail
The final payment of US$2.2 million (A$3.4 million) is in addition to the US$1 million received in
February 2025, further strengthening the Company’s treasury position to over A$10 million2. Settlement of these balances follows the Company’s 17 February 2025 announcement outlining binding terms for a Farmout Participation Agreement (PA) with Burgundy in relation to Project Phoenix. Under the agreement, 88 Energy’s wholly owned subsidiary, Accumulate Energy Alaska, Inc. (Accumulate), will be fully carried for all costs associated with the upcoming horizontal well programme, including an extended flow test currently scheduled for mid-CY26.1
Burgundy Xploration LLC is a Texas-based private oil and gas company backed by sophisticated energy investors, which has invested over US$26 million in Project Phoenix to date. Burgundy has secured initial funding to settle the residual balance owed to 88 Energy and to initiate procurement
of long-lead items for the planned CY26 horizontal drilling and production test programme.
The recently announced PA marks a key milestone for 88 Energy, serving to financially de-risk Project Phoenix while delivering significant value for shareholders. Importantly, the PA implies a transaction value approximately 50% higher than 88 Energy’s invested capital in Project Phoenix since mid-CY22, while enabling investors to continue to participate in future success. Following completion of the PA, Burgundy will become the operator of Project Phoenix, enabling 88 Energy
to focus on advancing and de-risking Project Leonis.
Project Phoenix: Forward Work-Program:
88 Energy has commenced work with Burgundy to progress planning and permitting for the horizontal test well and flow back operation scheduled for mid-CY26. Upon completion of the Farmout transaction, transition of operatorship to Burgundy will occur.
Experienced Alaskan service provider, Fairweather LLC has been retained to manage project planning, permitting and operational support to ensure that well objectives are met. Additionally, recent work completed by ResFrac will be incorporated into the planning for the stimulation and
flowback programme of the planned horizontal well.
Key Details of the Planned Horizontal Well and Flowback Operation:
- Location: Franklin Bluffs gravel pad
- Planned Zone for Flow Test: SMD-B.
- Lateral Length: ~ 3,500 ft
- Operational Test Duration: ~ 90 days
- Planned Spud Date: Mid-2026
About Project Phoenix (~74.3% WI) and the Hickory-1 Discovery Well
The Hickory-1 discovery well was drilled in February 2023 and flow tested during the Alaskan winter season in Q1/Q2 CY24. Testing focused on the two shallower primary targets, the Upper SFS (USFS) reservoir, previously untested, and the SMD-B (SMD) reservoir. Each zone was independently isolated, stimulated, and flowed oil to the surface either naturally or using nitrogen lift to facilitate efficient well clean-up. On the 18th of September 2024, a contingent resource for the
SMD-B, Upper SFS and Lower SFS reservoirs was issued by ERCE. This contingent resource is now added to the pre-existing contingent resource in the BFF reservoir, issued by NSAI in November 2023. The total net 2C contingent resource at Project Phoenix is 239 MMBOE.