estern Australia, the home of 88 Energy, is in some ways the antipodean Alaska. The state shares the distinction of being its country’s largest by area. Although not as thinly populated as Australia’s Northern Territory, most of its people are concentrated in a single city, Perth. It also has a Barrow Island, named after the same Sir John Barrow for whom Alaska’s northernmost point was named in 1826. And the state economy is dominated by oil and gas production, responsible for 61 percent of Australia’s total petroleum output.

Far from the oil fields at home, 88 Energy looks across the globe, describing itself as an “Alaskan-focused oil exploration and appraisal company.” Even for the North Slope, though, 88 Energy is oriented Down Under, working on units far to the south of most other operators. Its portfolio spans 440,000 net acres of the central North Slope region and into the National Petroleum Reserve-Alaska (NPR-A), on land leased both from the state and federal governments.

Since 2015, 88 Energy has held leases at Project Icewine, which encompasses 193,000 acres south of Prudhoe Bay. The company has conducted seven well penetrations across that project area, at sites designated Icewine-1 and Charlie-1. Icewine is the only North Slope asset that 88 Energy operates but does not have a 100 percent working interest, instead owning a 75 percent share.

To the west, 88 Energy has two working areas on the south side of NPR-A. Project Peregrine is on 195,973 acres acquired in August 2020 via an off-market takeover of fellow Western Australia oil explorer XCD Energy. Sitting on top of the Nanushuk and Torok oil plays, Peregrine has a prospective oil resource of 1.6 billion barrels. In early 2021, 88 Energy drilled the Merlin-1 well, which demonstrated the presence of light oil in three targets.

Just south of Peregrine is 88 Energy’s Umiat field. The company says historic flow testing demonstrated a sustained rate of 200 barrels per day, peaking at 800 barrels per day, with no water mixed in. Umiat has the potential to combine with Peregrine for field operations.

Farther to the east, just inland from ExxonMobil’s Point Thomson unit, is 88 Energy’s Yukon lease area, covering 19,000 net acres. In the early ‘90s, the Yukon Gold-1 exploration found oil there along the Canning River, which forms the western boundary of the Arctic National Wildlife Refuge (ANWR). Further 3D seismic mapping in 2018 estimated a resource of 90 million barrels of oil equivalent.

The proximity to ExxonMobil’s infrastructure positions the Yukon leases as a jumping-off point for development inside ANWR. A Texas-based subsidiary of 88 Energy, Regenerate Alaska, paid $771,000 for Tract 29, a 23,400-acre sliver of land on the Canning River’s opposite bank during the first—and so far only—ANWR lease sale in January 2021, in the waning days of the Trump administration.

However, ANWR exploration is no longer in the company’s sights.

Of the twenty-two leases offered in the ANWR sale, nine winning bids came from the state-backed Alaska Industrial Development and Export Authority, paying the minimum $25 per acre. One lease went to Knik Arm Services, a Texas-based company managed by an Alaskan, Mark Graber, who says he considers the purchase a future investment.

Regenerate Alaska was the only other bidder on ANWR acreage, but this spring the company backed out. In May 2022, Regenerate Alaska asked the US Department of the Interior to rescind the lease, and the Bureau of Land Management refunded the company’s bonus bid and lease rental payments.

A map of 88 Energy’s four project areas on the North Slope.

Not alone in backtracking, 88 Energy and its subsidiary were following the lead, in a way, of Hilcorp and Chevron, which both gave up ANWR leases last year. They didn’t receive a refund, though; those legacy leases were on Native land owned by Arctic Slope Regional Corporation, and the companies reportedly paid a $10 million “breakage fee.” Chevron had been a lease operator on 90,000 acres of Arctic Slope Regional Corporation land within ANWR since 1984, drilling the KIC-1 well in the late ‘80s in cooperation with BP. The legacy lease was one of the assets that Hilcorp took over from BP in late 2020.

The forty-year debate over ANWR development has made it a toxic topic for risk-averse corporations. No explanation for 88 Energy’s withdrawal was given, beyond an initial statement after the lease sale that future exploration would be subject to discussion with other parties. However, steering clear of controversy is consistent with 88 Energy’s stated commitment to the World Economic Forum’s reporting framework for Environment, Social, and Governance policies. The company pledges to work for sustainable water consumption, for example, and offsets for carbon emissions, so avoiding a designated wildlife refuge is consistent with that messaging.

Tract 29 may yet make a matched set with 88 Energy’s Yukon leases, but not as part of ANWR.

The land is currently subject to an ownership dispute between the State of Alaska and the federal government. In 2016, the state claimed that it owns the east bank of the Canning River and that the ANWR boundary is supposed to be the Staines River, several miles away, forming the opposite side of Tract 29. The US Board of Land Appeals rejected the claim in 2020, but the state is appealing that decision in federal court.

That baggage was public knowledge at the time of the ANWR lease sale, so it likely wasn’t a cause of 88 Energy’s retreat. The dispute does pose an opportunity, though. A ruling in the state’s favor would eject Tract 29 from ANWR, allowing state authorities to offer the tract in a future lease sale. If that happens, 88 Energy or its subsidiary could grab it again.

In the meantime, the exit from ANWR hardly ended 88 Energy’s activity on the North Slope. In May, the company announced that third-party evaluation of mapping at Icewine East was complete. The mapping is partly based on wells drilled in neighboring acreage by Pantheon Resources. In late June, 88 Energy signed a licensing agreement with SAExploration to study the survey company’s seismic data for the area, paid with $1 million worth of shares of the company. A new exploration well is planned for 2023.

At the Peregrine project in NPR-A, 88 Energy began drilling its Merlin-2 well in March, targeting 652 million barrels. Drilling stopped at a total depth of 7,334 feet, penetrating all three targeted reservoirs. The company reports elevated gas readings and oil shows. The next step is to confirm the presence of an extractable hydrocarbon discovery from the well.

With its emphasis on exploration and proving up assets, 88 Energy is barely an oil producer. The only crude being pumped comes from its Longhorn project in the Permian Basin of Texas, the one area where 88 Energy is looking beyond Alaska. That project was acquired in February 2022 and has grown to 650 barrels of oil per day equivalent.

At its annual shareholder meeting in May, 88 Energy touted Longhorn as a “low-capital, rapid payback investment,” supplying a trickle of cashflow to pay for future business activities. Those focus areas for the coming year are in Alaska, unlocking the potential at Icewine and continued assessment of unexplored potential at Peregrine, Umiat, and Yukon. Company managers even have an eye open for opportunities to grow and diversify the existing portfolio.

From its headquarters in Subiaco, a suburb of Perth, 88 Energy operates sixteen hours ahead of the Alaska time zone. When Alaskans are having dinner, it’s tomorrow morning in Australia. And while Alaskans sleep, the Australian company is busy thinking of ways to cash in on its Alaska dreams.