88 Energy Ltd (AIM:88E, ASX:88E, OTC:EEENF) told investors it has now received a final payment of US$2.2 million from Burgundy Xploration LLC, due under the farm-out at Project Phoenix, in Alaska.
This payment follows a US$1 million instalment made in February and takes the explorer’s cash position to over A$10 million, the company noted.
The farm-out deal, inked last month, provides a ‘full carry’ for 88 Energy in the Project Phoenix horizontal well programme, including an extended flow test.
Burgundy, which has invested more than US$26 million in Project Phoenix, will take over as operator once the farm-out is completed.
Planning and permitting are underway for the horizontal well and flowback operation at the Franklin Bluffs gravel pad. The well will target the SMD-B zone with a planned lateral length of approximately 3,500 feet and a test duration of around 90 days.
88 Energy described the recently announced arrangements as “a key milestone” that it expects will financially de-risk Project Phoenix.