88 Energy Ltd ( AIM:88E , ASX:88E , OTCQB:EEENF , FRA:POQ ) shares rose 18% to 1.22p after announcing a farm-out that secures up to A$15.5 million for the Augusta-1 and South Prudhoe work programme in Alaska.
Under the agreement, Westlawn Americas Offshore takes a 40% working interest in South Prudhoe, while 88 Energy retains 60% and continues to operate the project.
Westlawn will contribute A$13.1 million to drill and evaluate Augusta-1, covering about 52% of the planned well budget despite its minority stake.
Its contribution also includes A$2.4 million for non-well costs and advance purchases for a potential flow test, according to the company's announcement.
That reduces the explorer's funding burden, although 88 Energy remains responsible for A$11.9 million in well costs, A$3.2 million in non-well costs, and A$0.4 million for flow-test preparations.
To meet those commitments , the company said it was assessing strategic initiatives alongside its existing cash resources.
The funding agreement comes ahead of Augusta-1's planned drilling in the first quarter of 2027, targeting 133.7 million barrels of gross unrisked prospective resources.
Those estimates cover undiscovered accumulations across three reservoir intervals, but further exploration and evaluation are needed to establish potentially recoverable oil.
Assessing the opportunity, Cavendish said a discovery could benefit from existing infrastructure, reducing capital requirements, shortening development timelines and improving project economics.
The broker maintained its 'buy' rating and 19.8 pence price target, arguing that Westlawn's participation provided technical and commercial validation of Augusta-1 and South Prudhoe.
