Highlights

  • Franklin Bluffs-1H horizontal well and extended production test scheduled for Q3 CY26.
  • Burgundy to fully fund up to USD 39 million under the Project Phoenix farm-out agreement.
  • SMD-B reservoir targeted following confirmed oil mobility at Hickory-1 and Icewine-1.

88 Energy Limited (LSE:88E) has provided an update on Project Phoenix, its conventional oil and gas project located on Alaska’s North Slope, in which the company holds approximately a 75% working interest prior to earn-in adjustments. The update outlines progress toward a planned horizontal well and extended production test in 2026.

Project Phoenix is subject to a Farmout Participation Agreement executed with Burgundy Xploration LLC in February 2025. Under the agreement, Burgundy is funding all costs associated with the planned horizontal well and extended flow test, with 88 Energy carried during the Phase 1 work program.

2026 Drilling and Production Test Plan

The Franklin Bluffs-1H horizontal well and extended production test are planned for Q3 CY26, using the existing Franklin Bluffs gravel pad. The program includes an initial pilot hole to evaluate the SMD, SFS and BFF reservoir intervals through wireline logging and coring. Results from the pilot hole will be assessed prior to finalizing the horizontal well design.

The horizontal section is planned to target the SMD-B reservoir, a topset sandstone within the Campanian sequence. Proposed parameters include a lateral length of approximately 3,500 ft to 5,200 ft and an extended production test of around 90 days.

Reservoir Context and Prior Results

The SMD-B reservoir has been intersected in previous wells at Project Phoenix. Icewine-1 recorded a 71 ft net sandstone sequence with effective porosity ranging from 8% to 14%, while Hickory-1 intersected 52 ft of net pay with porosity of 5% to 11%. Flow testing at Hickory-1 in Q1 CY24 confirmed oil mobility, with recovered oil showing API gravity of 38.5 to 39.5 and a low gas-oil ratio.

Burgundy Joint Venture Developments

Burgundy has invested more than USD 26 million into Project Phoenix since the farm-out agreement and has met all cash call requirements. In October 2025, Burgundy confidentially submitted a draft registration statement with the U.S. Securities and Exchange Commission for a proposed initial public offering. Due to extended SEC review timelines linked to the U.S. government shutdown in 2H CY25, 88 Energy has granted Burgundy an extension until 30 April 2026 to complete its farm-out obligations.

Funding Structure and Lease Expansion

Under the farm-out agreement, Burgundy may fund up to USD 39 million across two phases, resulting in staged changes to working interests. Burgundy has also secured additional acreage in the Fall 2025 North Slope Bid Round, with 88 Energy retaining the option to acquire up to a 25% working interest in selected leases at cost until 1 October 2026.

Share Price Snapshot

88E was trading  at GBX 1.05 per share, as of 26 November 2025.