While periods without drilling can appear quiet externally, particularly when compared with earlier phases of the Company’s history, the period since Hickory‑1 in 2024 has been one of material technical and strategic progress. During this time, 88 Energy has significantly de‑risked Project Phoenix through detailed post‑well analysis, flow test interpretation, resource definition and planning for the horizontal production test.

At a corporate level, the February 2025 farm‑out with Burgundy established a clear funding pathway to the next major value catalyst at Project Phoenix, reflecting this disciplined approach. The agreement preserves shareholder exposure to upside while reducing the capital burden on 88 Energy and ensuring that the Franklin Bluffs‑1H horizontal well remains a key, planned drilling objective.

In parallel, the Company strengthened its technical capability in 2025 and has rapidly progressed high‑quality, infrastructure‑led opportunities in South Prudhoe. These prospects are the result of extensive technical work leveraging legacy data, regional well control and newly available 3D seismic, and are aligned with the Company’s strategy of targeting proven reservoirs adjacent to existing production and infrastructure.

With Project Phoenix and South Prudhoe now well defined, appropriately scoped and aligned with funding and infrastructure pathways, 88 Energy is positioned to move into its next phase of planned drilling. The Board and management remain focused on delivering wells that are technically robust, commercially credible and strategically aligned – rather than drilling for drilling’s sake – as the foundation for sustainable long‑term value creation.

Given the scale of the prospective resource and the technically robust nature of the Augusta-1 prospect, a win would typically look like in our view as:

• A credible partner with technical and financial capability
• Meaningful carry through drilling and testing
• Retention of material equity exposure, post carry
• Optionality for follow‑up appraisal on success

88 Energy’s Africa program is being advanced in a technically rigorous and capital‑conscious manner, with drilling decisions sequenced only when the balance of technical risk, funding, partner support and strategic priority is right. The Company will only advance to drilling activity when it meets clearly defined technical, commercial and funding criteria, and considered in the broader context of other opportunities in our portfolio.

Since we have farmed into PEL 93 the focus is on pre‑drill de‑risking activities, including the acquisition of 200km of 2D seismic data, the recently completed gravity and magnetic survey, integration of multiple technical datasets, finalisation of drill leads and prospects inventory and initiative pre-drill cost estimates and relevant environmental and permitting studies.

The first exploration licence period for PEL 93 concludes in October 2026. Prior to this date, the joint venture will be required to elect whether to enter the second licence period, which includes a committed first well within the subsequent three‑year term. Importantly, the program is not being rushed, nor is it capital‑constrained in the current licence period due to its low holding‑cost profile. The Operator of PEL 93 will prepare a report and proposal prior to the entry of the Second Renewal period, which includes a commitment well, for the Joint Venture and Namibian Governments consideration which is expect around mid-year.

Consistent with the Company’s broader strategy, 88 Energy will only drill its Africa play when it can do so with the highest‑quality technical target, appropriate partner alignment and an efficient funding structure. Timing matters, and drilling will be advanced when it meets the same standards applied across the portfolio, in order to maximise the probability of commercial success and long‑term shareholder value creation.

On funding, the Company’s objective is clear and consistent: to preserve shareholder exposure to upside while reducing the capital burden borne directly by 88 Energy wherever possible. Funding strategy is central to our planning and is not an afterthought.

Project Phoenix is to be funded via the February 2025 farm‑out arrangement with Burgundy, which provides a partner carry and establishes a clear pathway to the next major value catalyst while maintaining material exposure for 88 Energy shareholders. This structure reflects the Company’s disciplined approach to funding well‑defined, de‑risked opportunities without over‑reliance on equity dilution.

The Project Phoenix farm-out is a strong example of this approach, and we continue to assess the optimal funding pathways for Augusta in a way that balances dilution, partnership quality, timing, market conditions and strategic flexibility. We will not overpromise on structures or timing before they are sufficiently advanced, but shareholders should be assured that funding strategy is central to our planning.

Over the past 12–18 months, the Company has successful secured new high-prospective acreage, South Prudhoe and the Kad River East, and has progressed systematically de‑risking and upgrading the quality of its portfolio and prospects. This has included the acquisition and interpretation of new 3D seismic, integration of legacy and regional datasets, clearer definition of prospectivity, and the ranking and prioritisation of well‑defined drill targets.

This approach reflects a broader strategic focus on asset quality, technical rigour and capital discipline. The Augusta‑1 exploration well has emerged as a priority target as a result of this process, alongside continued maturation of Project Phoenix and more recently the Kad River East projects.

Consistent with this strategy, the Company is actively progressing a farm‑out process with multiple parties currently accessing the data room. A successful farm‑out would not only provide funding, but also deliver third‑party technical validation, which is itself a key de‑risking milestone.

While the share price has begun to strengthen over this period, it is reasonable to conclude that the market continues to factor in uncertainty ahead of specific catalysts such as farm‑out completion and drilling outcomes. As outlined previously, the technical and strategic progress made to date may not always generate the immediacy of a drilling headline, but these are the necessary steps required to improve portfolio quality and materially de‑risk future drilling opportunities for shareholders.

It is important to recognise that the share price is influenced by a wide range of external factors, many of which sit beyond the Company’s direct control, including broader market conditions, commodity sentiment, capital flows and macroeconomic variables. As such, short-term share price movements are not always a reliable reflection of the underlying value being created within the business.

What the Company can control, and remains firmly focused on, is the systematic building and advancement of a high-quality asset portfolio, alongside the disciplined execution of activities that progressively de-risk those assets. This includes securing strategically located acreage, such as the expansion of its North Slope position adjacent to major producing fields, rationalising the portfolio to focus on higher-impact lower-risk opportunities, and advancing key projects through technical work, farm-out agreements and planned drilling programs.

A clear example of this approach is Project Phoenix, where the Company has successfully secured a full carry for a material drilling and production testing program, which significantly reduces capital exposure while maintaining meaningful upside. This type of transaction demonstrates tangible value creation through technical progression and risk reduction, rather than reliance on short-term market sentiment.

In parallel, the Company continues to invest in data acquisition and interpretation, including seismic programs and integrated subsurface studies, to improve targeting accuracy and reduce geological uncertainty. This disciplined, data-led approach is central to converting Prospective Resources into commercially viable opportunities over time

Equally important is ensuring that the market has a clear and transparent understanding of these activities. The Company is committed to providing timely, high-quality information and reducing any perceived opacity around its strategy, work programs and milestones. The objective is to ensure that, as projects advance and risks are progressively removed, the market is in a position to more accurately ascribe value to the portfolio.

They matter for two reasons:

1. Portfolio diversification: These assets provide longer term exposure to large‑scale upside with relatively limited capital commitment.
2. Optionality: Each project in 88 Energy’s portfolio is independent in terms of resource potential and path to commercial success and any one on success can meaningfully change the company’s valuation trajectory

Kad River East is in the early stages of maturity with the Kad River 3D seismic data recently acquired. The prospectivity assessment is ongoing, and initial interpretation indicate the opportunity is comparable with proven North Slope turbidite systems.

Namibia offers exposure to a basin‑opening petroleum system. PEL 93 should be viewed as a low-cost, high‑impact option and the Company eagerly awaits the ReconAfrica production test results.  Entry to this acreage position was low cost with the shooting of a 2D seismic program whilst ReconAfrica does the early heavy lifting with the drilling of basin opening exploration wells.

88 Energy’s appeal is not based on an “all‑or‑nothing” exploration outcome, but on a portfolio constructed around multiple, largely independent value catalysts, underpinned by funding discipline and asset quality.

Rather than a single binary event, the Company offers:

• Multiple Alaska growth pillars capable of delivering material upside independently
• Downside risk moderated through portfolio depth, sequencing and optionality
• Strategic flexibility through staggered funding and partner-led execution

Importantly, each project in the Company’s portfolio is being advanced under the same philosophy outlined by the Board and management: technically rigorous preparation, disciplined capital allocation and sequencing of commitments when the balance of risk, funding and strategic priority is appropriate. This approach is designed to preserve shareholder exposure to upside while avoiding concentration on any single outcome.

In that context, investors are not being asked to underwrite a single exploration opportunity, but a portfolio of well‑defined opportunities, where success in any part of the portfolio has the potential to deliver meaningful value, and broader success compounds that outcome.

The relationship with Burgundy is constructive, aligned, and doing exactly what it was intended to do, de‑risk and advance Project Phoenix while protecting 88 Energy’s balance sheet. If Phoenix is successful, Burgundy will be a valuable long‑term development partner.

Kad River East has the potential to emerge as a meaningful upside opportunity for 88 Energy, which is why the Company has continued to invest in seismic acquisition and detailed geological analysis across the area. As outlined in the Company’s recent ASX announcement, the availability of full 3D seismic has materially improved the level of subsurface understanding and provided a stronger technical foundation than was previously available.

What is particularly encouraging at Kad River East is the quality and clarity of the seismic imaging. The 3D dataset provides clear structural definition and has enabled growing confidence in trap geometry and reservoir architecture. In addition, the seismic character and depositional interpretation show geological similarities to known large North Slope turbidite systems, such as Sockeye, supporting the broader play concept.

Capital discipline is central to 88 Energy’s operating model. Being fully or partially carried across several major work programs is not an end in itself, but a consequence of advancing technically credible, well‑defined opportunities that are attractive to partners.

The Company’s funding objective is clear and consistent: to preserve shareholder exposure to upside while reducing the capital burden borne directly by 88 Energy wherever possible.

Carried and structured funding arrangements support this objective by enabling progression of multiple assets without forcing heavy dilution or balance sheet stress.

Being fully or partially carried across multiple programs delivers several strategic benefits:

• Reduces dilution by limiting the need for equity funding
• Preserves balance sheet strength and strategic flexibility
• Increases the number of value catalysts while managing and sequencing capital commitments

Importantly, this approach allows the Company to advance a broader portfolio in a controlled manner, rather than concentrating capital into a single, high‑risk outcome. As the portfolio matures and more opportunities compete for capital, that flexibility becomes increasingly important.

That said, 88 Energy is not seeking to “stack” carried deals indiscriminately. Each funding structure is assessed on its merits, with careful consideration given to partner quality, alignment, timing and the broader strategic context. As with drilling decisions, funding arrangements must meet clear technical, commercial and strategic criteria.

The Augusta‑1 farm‑out process is progressing as intended and remains the Company’s preferred funding pathway for the well. As mentioned, multiple parties are currently reviewing the opportunity. Importantly, Augusta is being marketed from a strong technical and strategic position.

Key attributes of the Augusta opportunity include:

• 100% ownership by 88 Energy, providing flexibility in structuring
• High‑quality 3D seismic coverage, with multiple defined drilling locations
• Advanced permitting and planning, reducing execution risk
• A large, conventional target located close to existing infrastructure, consistent with the Company’s infrastructure‑led strategy

This combination of technical maturity and execution readiness is exactly what potential partners look for when assessing capital commitments, and it reflects the extensive technical work undertaken to date.

The Company cannot disclose which parties are involved as this is a confidential process.

Successful Phoenix testing and or a successful Augusta‑1 outcome in 2027 would be genuinely transformational for 88 Energy’s position on the North Slope.

In that scenario, the Company would transition from being viewed primarily as an explorer to being recognised as one of the more material independent operators on the North Slope, with multiple high‑quality assets rather than reliance on a single opportunity.

Specifically, success across Phoenix and Augusta would:

• Establish multiple development‑grade pathways, rather than a single‑asset dependency
• Differentiate 88 Energy from many peers who remain early‑stage or purely exploratory
• Significantly enhance strategic relevance given scale, infrastructure proximity and optionality

Importantly, Phoenix and Augusta are complementary. Phoenix offers a near‑term, production‑test‑led pathway, while Augusta provides exposure to large‑scale conventional resource upside with the ability to be rapidly commercialised on success. Together, they would demonstrate both delivery capability and growth potential, a combination that is relatively rare among North Slope independents.

It is important to emphasise that the pathway from a successful long‑term test to a full multi‑well development program cannot be determined with certainty until testing is complete. The purpose of the Franklin Bluffs‑1H long‑term test is to confirm reservoir performance, deliverability and stability over time, which are the key inputs required to assess commercial producibility.

If the long‑term testing is strong and confirms sustained flow rates and reservoir continuity, the focus would then shift to development planning and commercial assessment. This would include defining well spacing, development phasing, facilities requirements, capital intensity and the optimal tie‑in solution.

The proximity of Project Phoenix to existing North Slope infrastructure is a meaningful advantage in this context. Access to nearby roads and TAPS, as well as Deadhorse, can materially simplify development concepts, reduce capital requirements and shorten the timeline from commercial discovery to first production relative to more remote projects.

By way of precedent, a number of satellite developments on the Alaskan North Slope have progressed from commercial discovery or Final Investment Decision to first production in approximately two to three years. The key determinant in each case has been reservoir deliverability and commercial robustness, as well as proximity infrastructure, rather than simply the presence of hydrocarbons.