88 Energy has executed a binding Securities Purchase Agreement (SPA) with Lonestar I, LLC (Lonestar), Operator of Project Longhorn, for the sale of its 75% non-operated working interest in the producing oil and gas assets located in the Permian Basin, Texas, USA (Project Longhorn), held through subsidiary Longhorn Energy Investments LLC (88E – Longhorn).

Transaction Highlights 

• Total consideration of US$3.25 million, with final consideration subject to customary working capital and completion adjustments at the effective date, 1 July 2025.
• Proceeds to be redeployed into core exploration assets in Alaska and Namibia, in line with the Company’s stated growth strategy. 
• The Company elected not to participate in a new multi-well drill program at Project Longhorn, and 88 Energy is no longer exposed to costs associated with Project Longhorn, with an estimated gross cost of US$2 million per well. 
• Maintains financial discipline and focus on higher-impact, exploration-led value creation. 
• Since its acquisition in 2022, Project Longhorn has delivered meaningful cash flow of approximately US$6.1 million, which supported exploration and overhead costs.

Managing Director, Ashley Gilbert, commented: 
“The divestment of our interest in Project Longhorn is consistent with our disciplined approach to capital management and focus on assets with the potential to deliver outsized returns. This transaction further supports our efforts to accelerate progress across our exploration portfolio in Alaska and Namibia, jurisdictions that we believe offer an exceptional opportunity to generate meaningful value for our shareholders. 

We thank our Project Longhorn partners and extend our best wishes for their future drilling campaigns in the Permian Basin.”

Transaction Overview 

Following a strategic portfolio review conducted in Q1 2025, the Board concluded that Project Longhorn’s operating asset base no longer aligned with the Company’s long-term strategy, which is focused on high-impact exploration opportunities, primarily in Alaska. This decision was informed by the projected capital intensity of Project Longhorn’s future development plans, which would be required to maintain projected cash flows, and by 88 Energy’s objective to streamline its portfolio and redeploy capital to assets with greater upside potential. The future development plans at Project Longhorn are expected to involve a multi-well drill program, with an estimated gross cost per well of ~US$2 million, and the transaction removes the Company’s obligation to future costs associated with Project Longhorn, enabling 88 Energy to deploy its resources towards higher-impact, exploration-led opportunities.

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