88 Energy [LON:88E], the small-cap explorer with a big Alaskan footprint, is once again promising that Project Phoenix will rise. The company’s latest update outlines plans for a horizontal well and extended flow test in 2026 at its Franklin Bluffs acreage on the North Slope. The technical ambition is large; the corporate progress, as ever, hinges on a partner’s ability to write cheques on time.
Under a farm-out struck last year, Burgundy Xploration is set to fund up to $39mn of work in exchange for as much as an additional 50 per cent working interest. For now, 88 Energy retains roughly 75 per cent and — crucially — is fully carried for the costly drilling and testing programme slated for next year.
That carry provides some relief for shareholders accustomed to regular equity calls. But it also ties the project’s momentum to Burgundy’s financing schedule, and therefore to the vagaries of the US capital markets.
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The headline timetable remains intact. The Franklin Bluffs-1H well is pencilled in for the third quarter of 2026, starting with a pilot hole to cut through three stacked reservoir intervals — the Seabee (SMD), the deeper Seabee-Foreland Slope (SFS) and the Brookian (BFF).
The horizontal section will home in on the SMD-B, a topset sandstone in the Campanian sequence that has shown encouraging indications in earlier wells. Icewine-1 logged 71 feet of net pay with porosity up to 14 per cent; Hickory-1 recorded up to 11 per cent. Reservoir quality in the North Slope’s conventional horizons varies widely, so these comparative data points matter.
Detailed drilling plans
Drilling plans are detailed and deliberate. Logging and core analysis from the pilot hole will be used to design the lateral, expected to run between 3,500 and 5,200 feet. The subsequent production test is scheduled for roughly 90 days, long enough to determine whether flow rates can justify a development case. Operational readiness is progressing: contractor Fairweather has been appointed and 88 Energy has bolstered its in-state capability with a dedicated Alaska representative.
But it is Burgundy that must keep the timetable alive. The Houston-based explorer has put more than $26mn into the project to date and has met cash calls so far. Its next milestone is securing the capital to fund the 2026 programme. A draft registration statement for an initial public offering was quietly filed with the US Securities and Exchange Commission in October. Yet the prolonged federal government shutdown in late 2025 froze regulatory reviews, delaying progress. As a result, 88 Energy has extended Burgundy’s deadline under the farm-out to April 30, 2026.
There are signs of commitment: Burgundy has begun operational spending, appointed an Alaska-based engineer, and engaged with agencies and contractors. It also picked up 82,080 acres near the Toolik River Unit in the recent lease sale, offering 88 Energy the right to farm into up to a quarter of the new acreage at cost. Burgundy will additionally pay $2.4mn, in instalments tied partly to the success of its IPO, for access to the Icewine 3D seismic data that overlays part of the new ground.
88 Energy: The Armchair Trader View
If Burgundy clears its financing hurdles, the two-phase deal provides 88 Energy with a relatively low-cost pathway toward a potential development. Phase one, running through the 2026 horizontal well and test, would leave 88E with 35 per cent. A successful result would trigger phase two funding for an additional well or capital programme, after which 88E would retain about 25 per cent.
For a company often forced to dilute to drill, outsourcing the capital burden is attractive. But the price of being carried is dependency: Project Phoenix will only flare to life if Burgundy’s IPO can fly. Until then, 88 Energy must wait, hoping that this time, the North Slope’s promise extends beyond the PowerPoint slides.
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