REG - 88 Energy Limited - Project Phoenix - PA Amendment

88 EnergyAnnouncement

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RNS Number : 9989B  88 Energy Limited  27 April 2026

This announcement contains inside information

 

27 April 2026

 

88 Energy Limited

 

Participation Agreement aMENDMENT aHEAD OF PLANNED Franklin Bluffs-1H
horizontal well

 

PROJECT pHOENIX, NORTH SLOPE ALASKA

 

88 Energy Limited (ASX: 88E, AIM: 88E, OTC: EEENF) (88 Energy or the Company)
provides an update on the progress of its Joint Venture partner, Burgundy
Xploration LLC (Burgundy) toward the planned production test at Project
Phoenix on the North Slope of Alaska (Project Phoenix).

88 Energy has agreed to an extension of the funding milestone date under the
Participation Agreement (PA) aligning the timeline to Burgundy's planned US
initial public offer (IPO) process.

 

Highlights

·    Amended terms materially strengthen 88 Energy's contractual position
and include:

·    Additional near-term cash payments of US$400,000, in addition to
Burgundy's ongoing commitment to fund 100% of Project Phoenix costs.

·    Additional security over Burgundy's lease positions.

·    Accelerated payment structure for the outstanding Icewine 3D
consideration.

·    Extension considered finite and strategically appropriate, providing
Burgundy with a clear pathway to complete its required funding milestones from
the deep pool available within the North American equity capital market.

·    Burgundy's IPO process advancing, with draft Form-1 submitted and two
rounds of US Securities and Exchange Commission (SEC) comments completed.

·    Strong capital commitment demonstrated to Project Phoenix:

·    Burgundy has funded 100% of project costs to date under the US$29M
agreed carry.

·    Total net cash flow benefits to 88 Energy of approx. A$2.0M since
execution of the PA in February 2025, strengthening the Company's balance
sheet.

·    Spud of the Franklin Bluffs-1H remains subject to Burgundy's funding
and listing process timing and is now expected in Q1 2027, a short extension
to the planned spud timeline.

 

Commenting on the update, Ashley Gilbert, Managing Director of 88 Energy said:

"We're encouraged by Burgundy's steady progress through the SEC review process
and their demonstrated, unwavering commitment to Project Phoenix. The agreed
extension provides a clear and appropriate timeframe for Burgundy to complete
its funding activities, while delivering immediate value to 88 Energy through
additional near-term payments and materially enhanced security provisions.

We believe this to be in the best interest of our shareholders, ensuring the
Franklin Bluffs-1H well continues to progress, whilst enabling 88 Energy's
management and technical to team concentrate on the exciting South Prudhoe
acreage and preparations for the Augusta-1 well."

 

Amended Participation Agreement

88 Energy, via its wholly-owned subsidiary Accumulate Energy Alaska, Inc
(88E-Accumulate) has agreed to extend Burgundy's funding timeline under the PA
to 30 September 2026. This is to reflect the extended SEC review timeline,
which has been influenced by several factors including the 43-day US
government shutdown.

In consideration for this extension, Burgundy will immediately pay
88E-Accumulate an amendment fee of US$100,000, followed by a further
US$300,000 in payments towards the Icewine 3D, as well as agreeing to other
key amendment terms outlined below.

88 Energy considers this extension to be finite and sufficient to provide
Burgundy with the necessary timing to deliver on its funding requirements
under the PA.

Moreover, 88 Energy believes the extension positions Burgundy to achieve its
desired listing outcome, providing a deep liquidity pool for the future
advancement of Project Pheonix, without a material delay to the planned
drilling schedule.

Key terms under the amended Participation Agreement include:

·    Revised timeline: Phase I Longstop Date reset to 30 September 2026,
with Target Spud Date revised to 30 March 2027, aligning timing with funding
and execution realities.

·    Restructured Icewine 3D payment terms: Revised timing and structure
of Burgundy's US$2.25M payment for the Icewine 3D, including additional
interim payments in April and July 2026 totalling US$300,000, and an
accelerated repayment following IPO or alternative funding event, with
enhanced enforcement mechanisms.

·    Security over Fall 2025 North Slope leases: 88E-Accumulate to receive
a 10% working interest security over Burgundy's Fall 2025 North Slope leases
if lease payments are made while the Icewine 3D or any other payment amounts
remain outstanding. This includes a work‑stop mechanism until payment is
cured.

·    Optional extension tied to funding progress: 88E-Accumulate at its
discretion, may grant a one‑time extension of up to six months to the Phase
I Longstop Date, conditional on full payment compliance and demonstrable
progress toward funding.

·    Extended option over Fall 2025 North Slope Leases: 88E-Accumulate
granted the exclusive option to acquire up to 25% of Burgundy's 2025 North
Slope leases at cost (bid bonus and first‑year rentals), exercisable by 1
April 2027.

 

Burgundy SEC Registration Progress

Burgundy has advanced its US public listing process meaningfully since
confidentially submitting its draft registration statement on Form S-1 to the
SEC.

To date, Burgundy has responded to two rounds of SEC comments and, subject to
completion of this review, expects its IPO to proceed as planned.

88 Energy is regularly informed of Burgundy's progress per the terms of the
Participation Agreement and has confidence in the trajectory of the process.
This includes a direct confirmation of listing milestones from Burgundy's
advisory team which, in part, informed 88 Energy's decision to grant the
extension, which is in the best interests of its shareholders and other
stakeholders alike.

 

Operational Readiness and Capital Commitment by Burgundy

In parallel with the registration process, Burgundy has deployed a significant
amount of capital in advance of the planned Project Phoenix drilling campaign,
including operational preparatory work for drilling and testing activities.

88 Energy considers this to be further demonstration of Burgundy's commitment
to, and confidence in, Project Phoenix and its intent to deliver a successful
Franklin Bluffs-1H horizontal well and production test.

Since the execution of the Participation Agreement in February 2025, Burgundy
has paid approximately US$1.5 million total gross to 88 Energy, inclusive of
100% of the costs associated with Project Phoenix and the associated amendment
agreements.

As a result of Burgundy's payments, the total net cash flow benefits to 88
Energy of approximately A$2.0M have strengthened the balance sheet, enabling
the Company to deploy capital into new projects including the Kad River East
and South Prudhoe leases.

 

About the Franklin Bluffs-1H Production Test

The Franklin Bluffs‑1H (FB-1H) well is the next step in the appraisal and
commercialisation plan for Project Phoenix. The well is designed as a
horizontal production test, intended to validate commerciality of the project,
following the successful oil discoveries and flow testing results delivered by
the Hickory‑1 discovery well.

A vertical pilot hole at FB-1H is designed to intersect and evaluate the
stacked SMD, SFS and Basin Floor Fan (BFF) reservoir intervals through
wireline logging and data acquisition, prior to drilling a horizontal section
designed to test sustained producibility, flow performance and reservoir
deliverability over an extended period. The program is intended to replicate
proven development concepts successfully employed on adjacent North Slope
fields and to underpin future development planning.

The FB‑1H production test is underpinned by the multi‑reservoir discovery
confirmed at the Hickory‑1 well, which demonstrated oil flow to surface from
both the SMD‑B and Upper SFS reservoirs and validated the presence of a
deeper BFF system. Independent contingent resource estimates total
approximately 378 MMBOE 1  (#_ftn1) (gross, best estimate, 2C) across the SMD,
SFS and BFF reservoirs. The FB‑1H well is designed to advance these
resources along the development pathway by demonstrating horizontal well
productivity in the best‑developed reservoir units, leveraging the Projects
close proximity to the Trans‑Alaska Pipeline System and existing North Slope
infrastructure.

 

Project Phoenix and FB-1H Advancement Schedule

·   Advanced well and production test planning: Burgundy to continued
detailed well design, AFE estimation, engineering and operational planning for
FB-1H well and production test

·   Assess possible synergies: Burgundy and 88 Energy to assess possible
program synergies, such as rig sharing and other services to reduce costs.

·   Final approval of S1: Burgundy to secure final approval of the S1
document from the SEC in the near term and commence fund raising process and
IPO.

 

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, Investor and Media Relations
 Michael Vaughan                                                                Tel: +61 (0)422 602 720

 Euroz Hartleys 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

 

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. 88E is not
aware of any new information or data that materially affects the information
included in the referenced market announcements and that all material
assumptions and technical parameters underpinning the estimates continue to
apply and have not materially changed

 

 1  (#_ftnref1) Refer to ASX announcement dated 18 September 2024 for full
details.88E is not aware of any new information or data that materially
affects the information included in the relevant market announcement and that
all material assumptions and technical parameters underpinning the estimates
continue to apply and have not materially changed.

 

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