88 Energy Ltd on Monday said it has agreed a farm-out agreement for the Project Phoenix horizontal test well in Alaska.
The Subiaco, Australia oil exploration company said Burgundy Xploration LLC will fully fund up to US39 million of the project’s total gross future work programme costs in exchange for up to an additional 50% working interest.
88 Energy said the deal provides a ‘clear funding avenue’ to advance Project Phoenix towards a final development decision.
Phase 1 will see Texas-based Burgundy Xploration fund $29 million investment, with a further $10 million to follow.
Shares in 88 Energy were down 3.0% at 0.080 pence each in London on Monday afternoon.
Managing Director Ashley Gilbert said he is ‘delighted’ to announce the ‘mutually beneficial agreement.’
‘Today’s announcement crystalises a funding pathway for the asset, enabling critical production testing at the Hickory-1 multi reservoir discovery - a key step in proving the project’s economics and potential future commerciality. To have achieved a work-programme carry in just two years of exploration and advancement since the drilling of Hickory-1, underscores the implied value of the asset and serves as a blueprint for our strategy moving forward.’
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