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Highlights
- Burgundy has paid US$2.0 million to 88E to partially settle outstanding cash calls.
- A standstill agreement provides additional time to Burgundy to cure and pay the remaining amount of US$1.745 million by 31 January 2024.
- Fully funded 88E remains focused on delivering the successful flow testing of multiple reservoirs at the Hickory-1 well in 1Q24.
88 Energy Limited (ASX: 88E, AIM: 88E) has secured US$2.0 million from Burgundy Xploration, LLC as part of the settlement towards outstanding cash calls of US$3.745 million. Burgundy is the JV partner of 88E in Project Phoenix.
Moreover, 88E has entered into a standstill agreement with Burgundy, through its subsidiary company, Accumulate Energy Alaska, Inc. In line with this agreement, Burgundy gets time, till 31 January 2024, to cure and pay the remaining outstanding amount of US$1.745 million. In case, Burgundy fails to pay the outstanding amount, 88e would receive 50% of Burgundy’s working interest in Project Phoenix-based Toolik River Unit leases.
Burgundy is required to sign and return the Hickory-1 flow test AFE (Authorization for Expenditure), reflecting the updated working interest level within the five days after 31 January 2024, post Transfer interest. If the company could not make payment for its part of the AFE cost within the six months post the due date of the AFE cash call, then 50% of the remaining working interest of Burgundy in Toolik River Unit leases would transfer to 88E, post the transfer interest.
Furthermore, Burgundy has shared its intent with 88E to fund its part of the Hickory-1 flow test campaign.
In the first quarter of 2024, the company expects to deliver flow testing of several reservoirs at the Hickory-1 well.