88 Energy Gains Attention as Cavendish Sees Major Upside After Burgundy Deal Update
88 Energy Gains Attention as Cavendish Sees Major Upside After Burgundy Deal Update
88 Energy Ltd has drawn fresh market attention after UK broker Cavendish repeated a Buy rating and a 19.8p target price for the Alaska-focused oil explorer.
The brokerâs view followed an updated participation agreement between 88 Energy and Burgundy Xploration for Project Phoenix. Cavendish said the target compares with a share price of around 1.3p, suggesting very large potential upside if the company delivers on its plans.
Updated Burgundy Agreement Adds Cash and Flexibility
Under the revised deal, Burgundyâs funding timeline has been extended to 30 September 2026. The extension is designed to line up with Burgundyâs planned US public listing process.
In return, 88 Energy is set to receive US$400,000 in extra near-term payments. This includes a US$100,000 amendment fee and US$300,000 linked to the Icewine 3D consideration.
Project Phoenix Funding Remains Key
Burgundy has confirmed its commitment to fund 100% of Project Phoenix costs under the Phase 1 agreed carry of US$29 million. The broader farm-out agreement could see Burgundy fund up to US$39 million in future gross work programme costs.
This funding support is important because it allows 88 Energy to progress Project Phoenix while also directing capital toward other areas, including Kad River East and South Prudhoe.
Broker Highlights Stronger Security Terms
Cavendish said the revised terms provide immediate value through extra cash payments and stronger security arrangements. These protections include rights over Burgundyâs North Slope lease positions if certain payments remain outstanding.
The agreement also gives 88 Energy an option to acquire up to 25% of certain lease interests at cost, strengthening its position in Alaskaâs North Slope region.
Focus Turns to South Prudhoe and Augusta-1
Alongside Project Phoenix, 88 Energy continues to prepare for work across its wider Alaska portfolio. The company is planning and permitting the Franklin Bluffs-1H horizontal well, which will include a vertical pilot hole.
The well is expected to evaluate several reservoir intervals, including SMD, SFS, and BFF. The horizontal section is designed to test sustained productivity and reservoir deliverability.
Why Investors Are Watching 88 Energy
88 Energy remains a high-risk exploration company, but the latest update gives investors several points to watch. These include Burgundyâs funding progress, the US listing timeline, drilling preparations, and further technical updates from Alaska.
While Cavendishâs target price suggests major upside, exploration stocks can be volatile. Future performance will depend on funding, drilling results, oil market conditions, and execution across 88 Energyâs projects.
This article is for information only and should not be considered financial advice.
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