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- Oil and gas explorer Xstate Resources (XST) has acquired a 10 per cent working interest in a series of energy assets in Alberta, Canada
- The assets consist of oil and gas fields and related production equipment, located between Edmonton and the U.S.-Canada border
- Xstate Resources paid $255,000 cash and $70,000 worth of company shares as its purchase price
- The company also paid an additional $85,000 to reactivate the the wells, which is already underway
- Xstate Resources is up 12.5 per cent and trading at 1.8 cents per share
Oil and gas explorer Xstate Resources (XST) has acquired a 10 per cent working interest in a series energy assets in Alberta, Canada.
In January 2021, the company announced its intention to acquire an interest in crude oil and gas-producing assets in southern Alberta, Canada. The assets specifically consist of oil and gas fields and related production equipment, located on properties between Edmonton and the U.S.-Canadian border.
Xstate Resources paid $255,000 cash for the assets, all of which was funded from the company’s existing cash reserves. The company also issued around 10.9 million Xstate shares, worth approximately $70,000, as part of its purchase price.
Canadian energy company, Blue Sky Resources, will act as a private operator for the assets.
Xstate Resources’ Managing Director, David McArthur, believes that the assets will be highly complementary to the company’s Red Earth acquisition.
“This acquisition again underscores Xstate’s commitment to build a producing oil and gas business at these relatively low oil prices,” he said.
“Whilst much of the North American Oil Industry is in turmoil, Xstate has purchased this production with existing cash and stock,” he added.
Currently, production from the assets sits at around 100 barrels of oil per day. However, Xstate Resource is working to bring select wells back to full production levels of 500 barrels of oil per day.
The company has already remitted an additional $85,000 to the operator, Blue Sky Resources, to reactive the wells. which is now underway.
Xstate Resources is up 12.5 per cent, trading at 1.8 cents per share at 2:54 pm AEDT.
