Regulatory Delays Cloud Timing of 88 Energy’s Key Farm-Out and Drilling Plans

Strategic Expansion on Alaska’s North Slope

88 Energy Limited (ASX – 88E) has made a decisive move to bolster its presence in one of the world’s most prolific hydrocarbon regions by securing 14 new leases covering 34,560 acres in the North Slope Fall 2025 Bid Round. This acquisition notably expands the company’s operated footprint to a contiguous 52,269-acre position in the South Prudhoe area, immediately south of the Prudhoe Bay Unit, North America’s largest oilfield.

The South Prudhoe acreage targets the Ivishak Formation, a high-quality sandstone reservoir renowned for its excellent porosity and permeability, supported by extensive offset well data. This formation has historically produced over 13 billion barrels of oil, underscoring the potential value of 88 Energy’s expanded position. The company is exploring multiple low-capital development pathways, including tie-backs to existing infrastructure such as Pump Station 1 or direct connections to the Trans Alaska Pipeline System (TAPS).

Kad River East – Unlocking Underexplored Potential

Beyond South Prudhoe, 88 Energy has also secured seven leases covering 17,920 acres east of TAPS in the Kad River East area. This region remains underexplored but shows promising signs of a multi-reservoir petroleum system, with upcoming seismic data expected to provide critical insights in 2026. The company plans to license and reprocess 3D seismic datasets and integrate historical well data to refine prospective resource estimates, positioning Kad River East as a longer-term growth opportunity.

Project Phoenix and Farm-Out Progress

On the farm-out front, 88 Energy’s joint venture partner Burgundy Xploration LLC continues to advance its funding strategy for the Project Phoenix drilling program. Despite delays caused by a prolonged US government shutdown impacting SEC review timelines, Burgundy has confidentially lodged a draft registration statement for an IPO and has invested over US$26 million into the project to date. Burgundy’s operational readiness has improved with key appointments and logistical planning underway, while 88 Energy retains the right to participate up to 25% working interest in additional acreage secured by Burgundy.

Namibian Portfolio and Regional Activity

In Namibia, 88 Energy’s PEL 93 licence has been extended by 12 months, allowing the joint venture to conduct a high-resolution gravity survey in early 2026. This survey aims to enhance subsurface imaging and support the maturation of drill-ready targets. Nearby operator ReconAfrica’s positive results from the Kavango West-1X well, which shares geological similarities with PEL 93, add further encouragement to the region’s prospectivity.

Portfolio Optimisation and Financial Position

As part of ongoing portfolio optimisation, 88 Energy relinquished its non-core Peregrine and Umiat leases, reducing future annual lease costs by approximately A$0.7 million and allowing the company to focus capital and technical resources on higher-potential assets. At the end of December 2025, the company held a cash balance of A$6.8 million, supporting continued exploration and evaluation activities, including well permitting, seismic analysis, and farm-out planning.