Alaska prospects advanced
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88 Energy quarterly: Leonis project expanded to 664 million barrels of oil
Kay Cashman Petroleum News
88 Energy Limited's quarterly activities report revealed steady growth across its global oil and gas portfolio in the quarter ending June 30.
In regard to Alaska, at the Leonis project on the eastern North Slope the Australia-based company expanded its resource base with new lease awards and updated seismic data and is now estimating a combined net mean prospective resource of 664 million barrels of oil across the Canning and Upper Schrader Bluff prospects.
Planning and permitting has advanced for the Tiri-1 exploration well targeting both the Canning and the USB prospects with potential deeper reservoir upside. Farm-out discussions are ongoing to secure a partner for drilling. 88 Energy's 100% working interest positions the company favorably to carry through on its farm out process.
Third party evaluation is on-going. Formal award of four additional leases totaling approximately an additional 10,200 acres was received, bringing the total acreage to more than 35,000 contiguous acres.
Furthermore, the acquisition of the Great Bear 3D seismic survey in 2024 significantly expanded the regional 3D dataset. The new data overlaps both the existing Leonis acreage and the Storms and Franklin Bluffs datasets, enhancing project evaluation.
Also, key vendors have submitted operational proposals, contributing to an updated AFE, or authorization for expenditure.
Project Phoenix 88 Energy wholly owned subsidiary Accumulate Energy has a 75% working interest in the Phoenix project on Alaska's central North Slope.
On Feb. 17, 88 Energy announced it had entered into binding terms for a farmout participation agreement with Burgundy Xploration in relation to Project Phoenix. Under the agreement, Accumulate would be fully carried for all costs associated with the planned horizontal well program that included an extended flow test.
Transaction highlights:
*Burgundy to fully fund up to US$39 million of Project Phoenix's total gross future work program costs in exchange for up to an additional 50% working interest in Project Phoenix.
*Provides a clear funding avenue to advance Project Phoenix towards a final development decision via a two-phase farm-in arrangement:
--Phase 1: Burgundy to fund US$29 million for CY25/26 work program, including drilling of a horizontal well and production testing scheduled for H1 CY26 (88 Energy fully carried Accumulate working interest post Phase 1 farmout 35%).
--Phase 2: Upon Phase 1 success, Burgundy to fund up to US$10 million for an additional well or other CAPEX program (88E carry up to US$7.5 million, based on the current 75%, with Accumulate working interest post Phase 2 farm-out to 25%).
88 Energy continued to work with Burgundy to advance planning and permitting for the horizontal test well and flowback operation currently scheduled for Q2/Q3 CY2026 and Burgundy is progressing well towards its North American public listing. Burgundy continued to reaffirm its project commitment by paying 2025 cash calls during the quarter, including 100% of lease payments, which form part of its carried expenditure under the farm-out agreement.
In its recent quarterly report for the period ending June 30, 88 Energy addressed its farm-out activity and work program progress noting the following highlights:
*Joint venture partner Burgundy advanced its funding strategy to finance Phase 1 of the farm-out, targeting US$29 million to drill a horizontal well and conduct a long-term production test.
*Burgundy reaffirmed its commitment by meeting its 2025 financial obligations, including 100% of lease cost payments in accordance with the farm-out agreement.
*Ongoing optimization of the planned stimulation and extended horizontal flow test at the Franklin Bluffs gravel pad, with spud currently targeted for Q2/Q3 CY2026.
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