Cavendish sees very substantial upside for 88 Energy Ltd (AIM:88E, ASX:88E, OTCQB:EEENF, FRA:POQ) after the AIM-listed explorer secured access to a 3D seismic dataset over its Kad River East acreage in Alaska, with the broker reiterating a Buy rating and 19.8p target price (compared to the current price of 1.5p per share).
The stockbroker, in a note, highlighted that the firm's newly licensed Kad River 3D survey covers the entirety of the recently acquired leases and strengthens the case for an active, multi-reservoir petroleum system already indicated by legacy 2D seismic and historic well data.
Cavendish also pointed to hydrocarbon shows across several reservoirs in and around the acreage, including the Canning, Ivishak, Mikkelsen, Kuparuk and Lisburne intervals.
Nearby drilling success has added weight to that view, with Cavendish highlighting a nearby well success.
For the London-listed small-cap explorer, meanwhile, Cavendish expects new seismic data will be worked through in the first half of 2026, to be folded into 88 Energy’s broader subsurface model to define primary prospects and future resource potential. The broker also sees Kad River East as a longer-dated complement to the company’s near-term South Prudhoe focus, where the Augusta-1 exploration well is planned for the first quarter of 2027.
Looking at the broader Alaska portfolio, Cavendish said modelling of the Ivishak reservoir at Augusta points to a net present value of US$426 million, a post-tax internal rate of return of about 61%, and payback in roughly 2.8 years.