88 Energy Ltd ( AIM:88E , ASX:88E , OTCQB:EEENF , FRA:POQ ) has announced a farm-out deal, worth up to US$10.9 million (A$15.5 million), for its South Prudhoe project in Alaska.
The deal, which secures funding for the project, is expected to reduce 88 Energy's share of the cost of drilling the Augusta-1 exploration well ahead of a planned start in early 2027.
Houston-based Westlawn Americas Offshore will take a 40% working interest, with 88 Energy retaining 60% and operatorship.
Westlawn will contribute US$9.2 million towards drilling and evaluation, covering approximately 52% of the current well budget, plus US$1.7 million for other project costs and long-lead equipment for a potential flow test.
88 Energy remains responsible for A$11.9 million of well costs, A$3.2 million of non-well costs and A$0.4 million for flow-test equipment. It said it was assessing strategic initiatives alongside existing cash resources to meet that commitment.
The partners have also established a framework to pursue further North Slope opportunities.
"Securing a partner of WAO's calibre is a tremendous outcome for 88 Energy shareholders and is, without a doubt, a defining milestone in the advancement of the South Prudhoe Project," managing director Ashley Gilbert said.
"We have secured a partner that adds genuine value, having extensive Alaskan experience, deep upstream expertise and a long-term investment approach that is highly complementary to our own ambitions on the North Slope.
He added: "We believe this endorsement reinforces our confidence in the potential of Augusta-1 and the broader prospectivity we have identified across the acreage.
"More importantly, it establishes a partnership capable of creating value beyond a single well. This transaction materially reduces our funding exposure to Augusta-1 while allowing 88E to retain a 60% working interest and operatorship in what we believe is one of the most attractive remaining conventional exploration opportunities on the North Slope."
Augusta-1 will target 133.7 million barrels of gross unrisked prospective resources across the Ivishak, Kuparuk and Brookian reservoirs. These estimates relate to undiscovered oil and carry discovery and development risks. Drilling is scheduled for the first quarter of 2027.
