- Accelerated field development opportunity with low-cost worker program.
- Acquisition includes existing production and processing infrastructure
- Seven previously producing wells each equipped with a pump jack
- 400 acres adjoining AXP’s Oklahoma Edwards lease with multiple potential new drilling locations
AXP Energy (ASX: AXP) has entered into a strategic conditional agreement to acquire seven previously producing wells and associated production and water disposal infrastructure in the US state of Oklahoma.
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The proposed new asset is located on approximately 400 acres adjoining the company’s Edwards Lease and offers an opportunity to add low cost production.
On completion, AXP will acquire a 100% working interest and an approximate 80% net revenue interest in the project from Vertical Petroleum Industries LLC.
The seven acquisition wells were drilled within the last seven years and are fully equipped with pump jacks, production rods and tubing. The assets include a fully equipped tank battery and tank storage facilities, installed oil and gas separators, an oil and gas gathering system, a gas sales point and a saltwater disposal (SWD) facility.
The seven wells were completed in lower formations and AXP proposes to undertake Mississippian Lime level re-completions.
MD and CEO, Daniel Lanskey, said the proposed acquisition delivers a key benefit to AXP’s adjoining leases with planned connection of Charlie #1 well to the acquired SWD facility expected to support improved water management and potentially enhanced production.
“This acquisition offers a low-cost route to potentially increase oil and gas production with re-completions estimated at US$150,000 per well compared with approximately US$650,000 to drill and complete a new well,” Mr Lanskey said.
“These wells have never produced from the Mississippian Lime formation and that is our opportunity.
“We consider it to be the most prolific formation in this area and we have been very fortunate to secure the leases given our strong local presence here.”
He told shareholders successful re-completions could generate earlier cash flow to help fund further development drilling during 2027.
“Upon completion, our immediate focus will be undertaking back-to-back re-completions on the acquired wells. As well, with the current gas-to-power and compute operations running smoothly on the Charlie #1 well site, any additional gas production from the re-completions could be used to grow our gas to power operations in the near term.”
Gas produced from successful recompletions could also support an expansion of AXP’s gas-to- power operations. The installed oil and gas separators and gathering infrastructure provide a basis for recovering and handling gas for potential onsite power generation. Any expansion would depend on gas volumes, quality and pressure, equipment suitability, connection requirements and applicable approvals.
AXP’s lease holdings in Oklahoma is set to grow to approximately 1,800 acres with over 30 potential new drilling locations to support future field development.
AXP is up 25.0% to 0.5¢. Mkt cap $1.798M.
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