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88 Energy Ltd (ASX:88E) has announced a substantial upgrade to the contingent resources at Project Phoenix, located in Alaska. The revised estimate reveals approximately 378 million barrels of gross 2C contingent resources, representing a significant increase.
Details of the Upgrade
The updated resource estimate, provided by the independent consultant ERCE, reflects a more than 50% increase in the contingent resources within the multi-reservoir project’s SMD-B and SFS zones. Specifically, the new data adds 128 million barrels to the gross tally. This enhancement includes 115 million barrels of gross recoverable liquids (oil and natural gas liquids) and 68 billion cubic feet of gas. Net to 88 Energy, this adjustment equates to an additional 73 million barrels and 43 Bcf.
ERCE's evaluation also highlights "compelling additional upside potential" within the project’s Kuparuk, SMD-A, and C reservoirs, reinforcing the value of Project Phoenix.
Strategic Importance and Project Development
Project Phoenix is strategically positioned adjacent to the Trans-Alaskan Pipeline System (TAPS) and the Dalton Highway, which bolsters its logistical advantages. The updated contingent resource estimate validates both the project's significance and 88 Energy's development plans.
88 Energy’s managing director, Ashley Gilbert, emphasized the milestone achieved with the substantial resource estimate. The confirmation of multi-hundred-million-barrel discovered oil and NGL resources is a significant achievement for the company and its stakeholders.
The company is now preparing for an extended horizontal flow test of the SMD reservoir, utilizing the existing Franklin Bluffs gravel pad infrastructure. Additionally, discussions are underway with the joint venture partner regarding the advancement of Project Phoenix.
Future Plans and Partnerships
An agreement with Burgundy Exploration could lead to the partner covering 88 Energy’s share of expenditure for the 2025/26 work program in exchange for a larger stake in Phoenix. Concurrently, 88 Energy plans to initiate a formal farm-out process in the fourth quarter to secure funding for the next phase of the project.
Currently, 88 Energy holds a 74.3% ownership stake in Phoenix. Alongside Phoenix, the company is advancing another discovery area on Alaska’s North Slope—Leonis—which is wholly owned by 88 Energy. Leonis also hosts several hundred million barrels of resources and is subject to its own farm-out process.
Bottomline
The 50% upgrade to the resources at Project Phoenix underscores the project's substantial potential and strategic importance for 88 Energy. With ongoing developments and future plans, including potential partnerships and farm-out processes, the project is positioned for continued advancement and growth in the Alaskan oil and gas sector.
