How Will 88 Energy’s Fully Funded 2026 Well Unlock Alaska’s Project Phoenix?

Project Phoenix, A Strategic Advance

88 Energy Limited (ASX, 88E) has provided a comprehensive update on Project Phoenix, its advanced oil and gas venture on Alaska's North Slope. The company is gearing up for a pivotal phase with the planned drilling of the Franklin Bluffs-1H horizontal well and an extended production test slated for the third quarter of 2026. This development marks a significant step forward, fully funded by joint venture partner Burgundy Xploration LLC under a farmout agreement executed earlier this year.

The project, where 88 Energy currently holds approximately 75% working interest, benefits from Burgundy's commitment to finance up to US$39 million of future work program costs. This arrangement not only carries 88 Energy through the upcoming drilling and testing phases but also strategically reduces its capital exposure while maintaining a substantial stake in the asset.

Reservoir Quality and Testing Plans

The Franklin Bluffs-1H well will target the SMD-B reservoir, identified as the best-developed topset sandstone within the Campanian sequence. Previous wells, including Hickory-1 and Icewine-1, have demonstrated encouraging reservoir characteristics, with net sandstone thicknesses up to 71 feet and effective porosity reaching 14%. Flow testing at Hickory-1 confirmed oil mobility with high-quality light oil and a low gas-oil ratio, underpinning confidence in the reservoir's commercial potential.

The upcoming program includes an initial pilot hole to evaluate multiple reservoir zones, followed by wireline logging and analysis to optimize the horizontal well design. The extended flow test is planned to last approximately 90 days, providing critical data on production performance and reservoir deliverability.

Burgundy’s IPO and Operational Readiness

Burgundy Xploration is advancing its funding initiatives, having confidentially lodged a draft registration statement for an initial public offering with the U.S. Securities and Exchange Commission. Although the IPO timeline has been affected by a prolonged U.S. government shutdown, 88 Energy has granted an extension to April 2026 for Burgundy to fulfill its farmout obligations.

Operational preparations are well underway, with Fairweather LLC appointed to support execution and a dedicated Alaska-based engineer joining Burgundy’s team. These moves, alongside active engagement with regulatory bodies and stakeholders, position the joint venture to meet its commitments and commence drilling as planned.

Expanding Acreage and Strategic Positioning

In the recent North Slope Fall 2025 Bid Round, Burgundy secured 82,080 acres adjacent to the Toolik River Unit, with 88 Energy retaining the right to acquire up to a 25% working interest in these new leases at cost. This opportunity aligns with 88 Energy’s strategy to expand its footprint in a region experiencing renewed exploration momentum, supported by favorable government policies and infrastructure developments such as the nearing completion of Santos’ Pikka Phase 1 project.

Additionally, Burgundy has agreed to pay US$2.4 million for access to 88 Energy’s proprietary Icewine 3D seismic data, a critical asset for evaluating the new acreage’s prospectivity.

Outlook Amid North Slope Resurgence

The North Slope of Alaska is witnessing a resurgence driven by successful exploration, supportive policy frameworks, and infrastructure projects that promise to unlock significant hydrocarbon potential. Project Phoenix, with its confirmed contingent resources totaling 239 million barrels of oil equivalent, stands to benefit from this revitalized environment.

With drilling and testing activities scheduled for 2026 and first production potentially commencing as early as 2027, 88 Energy is well positioned to capitalize on the basin’s strategic importance. The partnership with Burgundy not only mitigates financial risk but also brings operational expertise and capital to advance the project efficiently.