Cavendish sees 18-fold upside at 88 Energy on Alaska prospect scale
Published: 07:56 22 Jul 2026 EDT
Cavendish has reiterated its buy rating and 19.8p target price on 88 Energy Ltd (AIM:88E, ASX:88E, OTCQB:EEENF, FRA:POQ), implying significant untapped upside from the current 1.02p share price.
The AIM-listed oil and gas explorer's South Prudhoe acreage on Alaska's North Slope now holds 768.9 million barrels of gross prospective resources, of which 640.7 million barrels are net to the company.
The acreage sits immediately south of the producing Prudhoe Bay and Kuparuk River units, two of the largest oilfields in North America, and within about six miles of existing infrastructure.
That proximity underpins the economics. Modelling only the Ivishak reservoir at the Augusta prospect, Cavendish arrives at a net present value of $529 million, a post-tax internal rate of return of about 61% and a payback period of roughly 2.8 years.
The broker described those returns as on a par with some of the best development projects globally.
A farm-out process for South Prudhoe is under way, with what analysts James McCormack and James Midgley called high-quality names engaged in the data room.
The Augusta well is designed to test up to 133.7 million barrels of gross prospective resources across three proven reservoirs, with a 48% geological chance of success, and is scheduled to spud in the first quarter of 2027.
Cavendish also pointed to APA Corporation's $70 million acquisition of Savant Alaska in June as validation of the strategy, arguing premiums are attaching to infrastructure-led acreage.
Separately, ReconAfrica's preliminary production testing at the Kavango West 1X discovery in onshore Namibia has read-across for 88 Energy's 20% interest in PEL 93, which lies about 200km west on the same Damara Fold Belt trend.
