REG - 88 Energy Limited - Project Phoenix - 2026 Production Test Program

88 EnergyAnnouncement

26/11/2025 07:00

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RNS Number : 0658J  88 Energy Limited  26 November 2025

 

This announcement contains insider information

26 November 2025

88 Energy Limited

Project Phoenix UPDATE

2026 production test program

88 Energy Limited (ASX:88E, AIM:88E, OTC:EEENF) (88 Energy or the Company) is
pleased to provide an update on Project Phoenix (~75% working interest), its
advanced conventional oil and gas project located on the North Slope of
Alaska.

Project Phoenix is subject to a Farmout Participation Agreement, entered into
with Burgundy Xploration LLC (Burgundy) in February 2025. Under the terms of
this agreement, 88 Energy is fully carried for all costs associated with the
upcoming horizontal well and extended flow test.

Highlights

·   Franklin Bluffs-1H horizontal well and extended flow test planned for
Q3 2026.

o   An initial pilot hole is planned to test the SMD, SFS and BFF reservoir
zones, followed by wireline logging, before suspending the well.

o   Production test in horizontal section to target the SMD-B reservoir, the
best-developed topset sandstone within the Campanian sequence.

o   Icewine-1 intersected a 71ft net sandstone sequence in the SMD-B with up
to 14% effective porosity, while Hickory-1 recorded up to 11% porosity in the
same interval.

o   Analysis of pilot hole and logging results to guide horizontal well
planning and design, prior to drilling the horizontal production well and
commence the extended production test.

o   Operational readiness is advancing, with Fairweather LLC appointed for
execution support and key staffing and operational enhancements underway,
including the appointment of an Alaska-based representative.

·   Burgundy advancing funding initiatives and commencing operational spend
to support a 2026 spud.

o   Draft registration statement for Burgundy's proposed IPO confidentially
lodged with the U.S. Securities and Exchange Commission (SEC).

o   The prolonged United States government shutdown in 2H 2025 has delayed
SEC review timelines. Consequently, 88 Energy has granted Burgundy an
extension under the Participation Agreement until 30 April 2026 to complete
its obligations in the farm-out agreement.

·   Burgundy declared the successful bidder in the recent North Slope Fall
2025 Bid Round for a further 82,080 acres adjacent to the Toolik River Unit,
with 88E securing the right to participate up to 25% working interest until 1
October 2026 at cost (bid bonus and rentals paid only).

·   Burgundy to pay US$2,400,000 to 88 Energy for access to the Icewine 3D
seismic data which covers a portion of the new leases recently secured by
Burgundy, with US$150,000 due by 1 December 2025, and the balance within 60
days of a successful IPO.

 

Burgundy Joint Venture Update

Burgundy continues to progress its funding program for the Franklin Bluffs-1H
horizontal well and extended production test. Supported by sophisticated
energy investors, Burgundy has invested more than US$26 million into Project
Phoenix and has met all cash call requirements since the Farmout Participation
Agreement was executed in February 2025.

On 15 October 2025 Burgundy announced that it had confidentially submitted a
draft registration statement on Form S-1 with the SEC relating to the proposed
initial public offering (IPO) of common stock. The IPO is expected to occur
after the SEC completes its review process, subject to market and other
conditions.  With the prolonged United States government shutdown in 2H 2025,
this has extended usual SEC review timelines. Consequently, 88 Energy has
granted Burgundy an extension under the Participation Agreement until 30 April
2026 to complete its obligations in the farm-out agreement.

Burgundy's operational readiness to drill has also advanced. Fairweather LLC
has been appointed to support execution, planning is underway to secure the
Franklin Bluffs 3D seismic dataset, and Burgundy has strengthened its in state
presence through the appointment of a dedicated Alaska-based engineer. The
Burgundy team has recently undertaken meetings in Anchorage with Government
agencies, key vendors and other stakeholders to advance permitting and
logistical preparations.

Together, these activities place Burgundy in a strong position to meet its
joint venture commitments and support the Franklin Bluffs 1H drilling and
production test programme in 2026.

Note: This announcement does not constitute an offer to sell or the
solicitation of an offer to buy any securities. Any offers, solicitations or
offers to buy, or any sales of securities will be made in accordance with the
registration requirements of the Securities Act of 1933, as amended.

 

Joint Venture Partner Farm-Out Recap

Under the Farmout Participation Agreement, Burgundy intends to fully fund up
to US$39 million (approx. A$60 million) of Project Phoenix's total gross
future work program costs in exchange for up to an additional 50% Working
Interest (WI) in Project Phoenix from 88 Energy. This agreement provides a
clear stage funding pathway towards a final development:

·   Phase 1: Burgundy to fund US$29 million (approx. A$45 million) for the
CY25/26 work programme, including drilling of a horizontal well and production
testing scheduled for Q3-CY26. 88 Energy is fully carried during this phase,
resulting in a 35% WI on completion.

·   Phase 2: Upon Phase 1 Success; Burgundy to fund up to US$10 million
(approx. A$15 million) for an additional well or other CAPEX program (88E
carry up to US$7.5 million (based on its current 75% WI), resulting in a 25%
WI post-Phase 2.

 

Project Phoenix Pilot Hole, Horizontal Well and Production Test

Following execution of the farm-out agreement with Burgundy in February 2025,
planning has progressed for the Franklin Bluffs-1H horizontal well and
extended production test scheduled to spud in Q3-CY26. The well will be
drilled from the existing Franklin Bluffs gravel pad and will target the SMD-B
reservoir, one of the most promising zones identified at the Hickory-1
discovery well.

Burgundy has proposed an initial pilot hole designed to intersect multiple
reservoir intervals, including the SMD and the deeper SFS and BFF.  A full
wireline logging and coring programme will be completed, with plans to utilise
reservoir sampling tools such as an MDT to test and recover hydrocarbons to
surface if possible.

The pilot hole will be suspended while results are analyzed and incorporated
into the detailed design of the Franklin Bluffs -1H horizontal well section.
Key parameters include:

·   Target Zone: SMD-B

·   Lateral Length: ~3,500ft to ~5,200 feet

·   Test Duration: ~90 days flow back and production test.

·   Spud Date: 2H-CY26.

 

 

SMD-B Reservoir: Geological Context

The SMD-B reservoir forms part of the Campanian sequence and is the
best-developed topset sandstone in the SMD series at Project Phoenix.
Hickory-1 intersected 52 feet of net pay with porosity ranging from 5-11%,
while Icewine-1 intersected a 71ft net sandstone sequence and showed higher
porosity values ranging from to 8-14%, indicating improved reservoir quality
in the Icewine-1 location.

Flow testing of the SMD-B at Hickory-1 in Q1 CY24 confirmed oil mobility with
samples of 38.5-39.5 API gravity oil and a low gas-oil ratio. These results
demonstrate reservoir deliverability and provide confidence that a horizontal
section with stimulation can enhance productivity.

For full details, refer to the ASX announcement dated 15 April 2024.

 

 

 

Regionally, Pantheon Resources confirmed a 565 ft hydrocarbon column in the
SMD-B topset at Dubhe1, exceeding pre-drill expectations by 26%. Additional
hydrocarbon-bearing zones were intersected in the SMD-C and two Slope Fan
intervals, with initial flowback operations now underway.

 

Five-Year Pathway: From Seismic to Target Production

Project Phoenix demonstrates 88 Energy's ability to de-risk and advance
high-potential acreage. Within five years, the Company has moved from seismic
licensing to farm-out, positioning for first production as early as 2027.

·   2022: Licensing and interpretation of the Franklin Bluffs 3D seismic
dataset, enabling precise mapping and well planning.

·   2023: Formation of the Toolik River Unit, consolidating lease position
and streamlining regulatory approvals. Drilling of Hickory-1 confirmed
multi-reservoir oil discoveries across the SMD-B, SFS and BFF intervals.

·   2024: Flow testing of Hickory-1 confirmed oil mobility and
deliverability. Independent certification established 239 MMBOE of net 2C
contingent resources (refer to Figure 7 & Table 1 for further details).

·   2025: Farm-out to Burgundy secured a full carry on a two-year work
program, including the upcoming Franklin Bluffs-1H well and production test.

·   2026: Planned spud of Franklin Bluffs-1H and extended production test
(~90 days).

Option to acquire 25% WI in Burgundy's Leases Secured in latest bid round

Burgundy has agreed to provide 88 Energy the right to acquire a 25% WI, at
cost, in the 57 new leases awarded in the North Slope Fall 2025 Bid Round.
Importantly, several of the western leases lie within the Icewine 3D seismic
boundary, where significant prospectivity remains.  The opportunity is
currently under evaluation by 88 Energy's new technical team.  88 Energy may
elect to participate in these leases at any time until 1 October 2026.

Burgundy to pay for historical Icewine 3D

Burgundy has agreed to pay US$2,400,000 to 88 Energy for access to the Icewine
3D seismic data, acquired solely by 88 Energy in 2018, with US$150,000 due by
1 December 2025 and the balance within 60 days of a successful IPO. This
seismic data will be key to Burgundy's assessment of the western lease block
secured by Burgundy in the recent bid round.

 

Resurgence of the North Slope, Alaska

The Alaskan North Slope is experiencing renewed oil and gas exploration and
development momentum, driven by supportive government policy, successful
exploration activity, and new infrastructure projects.

·   Policy support: Federal and State agencies continue to streamline
permitting, promote the strategic importance of Alaskan energy resources, and
actively encourage new investment in domestic energy production.

·   Exploration success: In early 2025, APA Corporation, Armstrong Oil
& Gas, and Santos Limited announced a major oil discovery at the Sockeye-2
well, delivered 25 ft of high-quality oil pay with porosity of 20% and average
flow of 2,700 barrels of oil per day without stimulation.

·   Infrastructure development: Santos' Pikka Phase 1 development is
nearing completion, with first oil expected in 2026 and production ramping up
in 2027. In parallel, the Alaska gas pipeline and LNG projects continues to
gain traction, with the proposed 42-inch pipeline to enable large-scale gas
exports from the North Slope.

·   Fall 2025 North Slope Bid Round: A total of 271 leases were bid on and
won by 9 different companies, representing a total of 466,764 acres. This
signifies a significant investment (US$17 million) and resurgence of interest
in the North Slope as an attractive oil and gas destination.

Together, these developments reinforce the basin's growing strategic
importance and highlight the commercial potential of assets like Project
Phoenix.

 

 

This announcement has been authorised by the Board.

 

 Media and Investor Relations
 88 Energy Ltd

 Ashley Gilbert, Managing Director

 Tel: +61 (0)8 9485 0990

 Email:investor-relations@88energy.com

 Fivemark Partners
 Michael Vaughan                                                                          Tel: +61 (0)422 602 720
 EurozHartleys Ltd
 Chelsey Kidner                                                                           Tel: +61 (0)8 9268 2829
 Cavendish Capital Markets Limited
 Derrick Lee / Pearl Kellie                                                               Tel: +44 (0) 131 220 6939
 Hannam & Partners
 Leif Powis / Neil                                                                        Tel: +44 (0) 207 907 8500
 Passmore

 

About Project Phoenix (currently ~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, 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 2023. The total
net 2C contingent resource at Project Phoenix is 239 MMBOE (refer to Figure 7
& Table 1).

 

Table 1: Project Phoenix net entitlement to 88 Energy (63.3%) Contingent
Resources estimates by NSAI and ERCE

 Project Phoenix               NET (~63.3%) Contingent Resources (4,6)
 Reservoir  Auditor    UoM     Low (1C)        Best (2C)       High (3C)
 SMD-B      ERCE(1,3)  MMBOE   7               24              79
 Upper SFS  ERCE(1,3)  MMBOE   6               21              72
 Lower SFS  ERCE(1,3)  MMBOE   8               35              123
 BFF        NSAI(2,5)  MMBOE   62              158             367
 Total(7)                      83              239             640

 

Notes to table 1:

1.   ERCE: ERCE Australia Pty Ltd

2.   NSAI: Netherland, Sewell & Associates Inc.

3.   Refer to page 6, Appendix 2 and disclaimers for further details.

4.   Million Barrels of Oil Equivalent (MMBOE) of estimate contingent
resource. NGLs are converted to oil equivalent volumes on a constant ratio
basis of 1:1. Gas is converted to oil equivalent volumes on a constant ratio
basis of 5.5 BCF per 1 MMBOE.

5.   Please refer to page 7 and ASX announcement dated 6 November 2023 for
further details in relation to the BFF Contingent Resource estimate. Note the
Basin Floor Fan (BFF) reservoir was drilled and tested on adjacent acreage by
Pantheon Resources

6.   88 Energy net resource entitlement of ~63.3% has been calculated using
an average 74.3% working interest net of a 12.5% government royalty and a 4%
Overriding Royalty on 18 leases.

7.   Totals by reservoir rounded and project total may not sum due to
rounding.

 

Pursuant to the requirements of the ASX Listing Rules Chapter 5 and the AIM
Rules for Companies, the technical information and resource reporting
contained in this announcement was prepared by, or under the supervision of,
Dr Stephen Staley, who is a Non-Executive Director of the Company. Dr Staley
has more than 40 years' experience in the petroleum industry, is a Fellow of
the Geological Society of London, and a qualified Geologist / Geophysicist who
has sufficient experience that is relevant to the style and nature of the oil
prospects under consideration and to the activities discussed in this
document. Dr Staley has reviewed the information and supporting documentation
referred to in this announcement and considers the prospective resource
estimates to be fairly represented and consents to its release in the form and
context in which it appears. His academic qualifications and industry
memberships appear on the Company's website, and both comply with the criteria
for "Competence" under clause 3.1 of the Valmin Code 2015. Terminology and
standards adopted by the Society of Petroleum Engineers "Petroleum Resources
Management System" have been applied in producing this document.

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