West Perth-based oil explorer 88 Energy has officially set the stage for what could become a transformative moment in its history, confirming plans for a major horizontal well and extended production test at its Alaskan Project Phoenix in the second half of 2026.
The Phoenix Rises: Project Details and Resource Potential
The company has locked in its fully funded Franklin Bluffs-1H horizontal well and a comprehensive 90-day production test at the Alaskan North Slope project. This ambitious program represents exactly the type of high-impact opportunity that junior explorers dream about.
Project Phoenix already boasts an impressive track record. The Hickory-1 discovery well, drilled in 2023, successfully flowed light crude oil during winter testing, significantly de-risking the company's substantial hydrocarbon play. Independent auditor ERCE has since upgraded the oilfield's estimated contingent resource to as much as 378 million barrels of oil equivalent (MMboe), with 239 MMboe attributable directly to 88 Energy.
The planned Franklin Bluffs-1H well will specifically test three highly promising sandstone horizons: the Upper SFS, SMD-B and BFF zones. These formations previously showed exceptional potential during earlier drilling campaigns.
Technical Success and Strategic Partnership
The project's technical credentials are compelling. Back in 2015, the company's Icewine-1 well encountered 71 feet of sandstone with porosity reaching up to 14 per cent. More recently, flow testing of a 52-foot interval in the SMD-B zone of the Hickory-1 well produced light crude that reached surface without artificial lift, peaking at approximately 50 barrels per day.
The quality of the oil proved exceptional, with API gravity measuring between 38.5 to 39.5 degrees, while reservoir porosity ranged from 5 to 11 per cent. Crucially, almost no gas accompanied the oil, suggesting a low gas-oil ratio that could enable a liquids-rich development.
88 Energy's strategic move came earlier this year when it inked a savvy farm-out agreement with Houston-based Burgundy Xploration. Under this arrangement, Burgundy will cover up to US$39 million (A$60 million) to fully fund future work in exchange for earning an additional 50 per cent stake in the project.
The funding breakdown includes US$29 million (A$44.5 million) committed for the first phase over the next two years, covering the horizontal well and flow test. If phase one delivers expected results, Burgundy will contribute another US$10 million (A$15 million) for either a second well or other key development work.
Operational Timeline and Expanded Footprint
Before drilling the horizontal Franklin Bluffs-1H well, Burgundy will first drill a pilot hole through the three main sandstone reservoirs to conduct comprehensive wireline logging and, if conditions permit, use sampling tools to bring hydrocarbons to surface. The well will then be temporarily suspended while engineers analyze the data to refine the horizontal design.
Planned lateral lengths range between 3,500 feet and 5,200 feet, with well stimulation expected to play a crucial role in unlocking the reservoir's productivity.
Operational preparations are already advancing rapidly. Burgundy has engaged Fairweather LLC to help manage the program, bolstered its on-ground expertise by hiring an Alaskan-based engineer, and initiated direct collaboration with government departments and key service providers.
The partnership has also expanded beyond the immediate drill bit. Burgundy recently acquired 82,080 acres in last week's North Slope lease sale, with 88 Energy securing an option to take a 25 per cent share of that ground at cost any time before October 2026.
Adding to the strategic alignment, Burgundy has agreed to pay US$2.4 million for access to 88 Energy's Icewine 3D seismic data, with an initial US$150,000 payment due by December and the balance tied to future capital raising.
The renewed exploration push in Alaska coincides with a broader renaissance on the North Slope. New oil discoveries, streamlined permitting processes under Washington's pro-oil administration, and major developments like Santos Limited's Pikka Phase 1 project are collectively breathing fresh life into the region.
For 88 Energy, the pieces are falling into place. A fully funded horizontal test in a reservoir that has already demonstrated its ability to move oil to surface represents about as high-impact an opportunity as a junior explorer could hope for. If Project Phoenix delivers on its promise next year, the West Perth company could find itself positioned with one of Alaska's most compelling new conventional oil opportunities, potentially seeing first production as early as 2027.
