88 Energy has announced the execution of a binding Participation Agreement and Joint Operating Agreement (together the Farm-out Agreement) with Westlawn Americas Offshore LLC (WAO), for the South Prudhoe Project on Alaska's North Slope.
The transaction delivers up to US$10.9 million (A$15.5 million) towards the drilling and evaluation of the Augusta-1 exploration well and South Prudhoe work-programme and budget, in exchange for a 40% Working Interest in the project, with 88E retaining a majority 60% WI and operatorship.
WAO's entry into Alaska is a strong endorsement of both South Prudhoe and 88E’s technical work and data-led exploration strategy, with the transaction contemplating the formation of an Area of Mutual Interest (AMI) between WAO and 88E to jointly identify and evaluate opportunities across the North Slope.
HIGHLIGHTS
- Farm-out Agreement executed with WAO for a 40% WI in South Prudhoe, with 88 Energy retaining a 60% majority WI and operatorship.
- WAO to fund US$9.2M (A$13.1M) towards Augusta-1 drilling and evaluation, representing ~52% of the current planned well budget.
- WAO will contribute a further US$1.7M (A$2.4M) towards G&A, G&G, lease costs and long-lead items relating to a future potential flow test at Augusta-1.
- 88E retains majority WI and operatorship, providing material upside to exploration success.
- In addition, on success WAO will fund 40% of any future potential flow test programme
- Augusta-1 is scheduled for spud Q1 CY2027, targeting 133.7 MMbbls 2U gross unrisked Prospective Resources across stacked Ivishak, Kuparuk, and Brookian reservoir intervals.
- WAO's participation follows extensive technical and commercial due diligence, providing third-party validation of both the Augusta-1 opportunity and 88 Energy's technical capabilities.
- Framework established for potential future collaboration on further North Slope opportunities.
- WAO is a Houston-based, well-capitalised upstream O&G company with a diverse portfolio of producing, development and exploration assets and a focus on long-term growth opportunities.
- WAO's leadership team brings extensive North Slope experience, including involvement with Prudhoe Bay and Alpine fields.
Commenting on the farm-out, Ashley Gilbert, Managing Director of 88 Energy said:
'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. 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.
WAO’s decision to farm-in follows a comprehensive technical and commercial evaluation of the Project and provides strong third-party validation of both the quality of the South Prudhoe opportunity and the substantial technical work undertaken by our team over the past 18 months. 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, with 133.7 million barrels of gross unrisked prospective resource mapped across multiple stacked reservoir intervals. This South Prudhoe-specific agreement delivers up to A$15.5 million towards the drilling and evaluation of the Augusta-1 exploration well and South Prudhoe work-programme and budget.
We are excited to be working with their team as we progress towards unlocking the full potential of South Prudhoe and beyond.'
Greg Hebertson, Founder, Co-Head, COO and George Easterly, Co-Head and CFO of WAO said:
'Alaska has long been an attractive region for investment for WAO and is one we’ve had our eye on for some time. Our technical and commercial review reinforced our belief that South Prudhoe represents a high-quality exploration opportunity which provides a solid foundation for our entry into Alaska’s North Slope.
We were particularly impressed by the quality of the underlying asset data, the scale of the prospectivity identified across the project area, the proximity to existing infrastructure, and the depth of technical and operational capability demonstrated by the 88 Energy team. Their experience on the North Slope and disciplined approach to project advancement give us confidence in both the opportunity and the pathway to execution.
While Augusta-1 is an exciting first step in our new partnership with 88 Energy at South Prudhoe, we view this transaction as the foundation for a broader potential strategic relationship with the 88 Energy team as well as for future growth across the North Slope. We look forward to drilling Augusta-1 together and to WAO building a meaningful long-term portfolio in Alaska.'
Click here for Augusta-1 Farm-Out Presentation
Click here for full announcement
Source: 88 Energy
