UK-based stockbroker Cavendish sees almost fifteen-fold upside in 88 Energy Ltd (AIM:88E, ASX:88E, OTCQB:EEENF, FRA:POQ) as the Alaska-focused explorer continues to progress its asset base in Alaska.
The broker, in a note following news of an amendment to its participation agreement with Project Phoenix partner Burgundy Xploration, reiterated a Buy rating and 19.8p target price, compared with a current share price of 1.3p, implying 1,395% upside.
It extends Burgundy’s funding timeline to 30 September 2026, aligning the timetable with its planned US public listing process. In return, 88 Energy will receive US$400,000 in additional near-term cash payments, made up of a US$100,000 amendment fee and US$300,000 toward the Icewine 3D consideration.
Cavendish said the revised terms deliver “immediate value” through extra payments and “materially enhanced security provisions”, while allowing 88 Energy to focus on its South Prudhoe acreage and preparations for the upcoming Augusta-1 exploration well.
The revised agreement also gives 88 Energy additional protection over Burgundy’s North Slope lease positions, including a 10% working interest security over Burgundy’s Fall 2025 leases if lease payments are made while amounts remain outstanding, plus an option to acquire up to 25% at cost.
Burgundy has reiterated its commitment to fund 100% of Project Phoenix costs under the Phase 1 US$29 million agreed carry. Under the broader farm-out agreement, Burgundy will fund up to US$39 million in total gross future work programme costs to move Project Phoenix toward a final development decision.
Cavendish noted that Burgundy has already paid US$1.5 million to 88 Energy since the participation agreement was signed in February 2025, including all costs associated with Project Phoenix, freeing 88 Energy to deploy capital into newer acreage, including Kad River East and South Prudhoe.
Planning and permitting continue for the Franklin Bluffs-1H horizontal well, which will include a vertical pilot hole to evaluate the SMD, SFS and BFF reservoir intervals before drilling a horizontal section designed to test sustained productivity and reservoir deliverability.