- Oil and gas company Xstate Resources (XST) has purchased a 15 per cent working interest in a Canadian oil asset, Red Earth, in a share and cash agreement
- The company will issue CAD$300,000 cash (A$320,000) and A$175,000 worth of Xstate shares
- The Red Earth asset includes six oilfields and has 160 producing wells
- Once acquired, Xstate will share the asset with Blue Sky Resources, who holds a majority 55 per cent and Sacgasco (SGC), who holds the other 30 per cent
- Managing Director David McArthur says the purchase takes Xstate from an explorer to an oil producer
- On market close for the weekend, Xstate is down 14.3 per cent and is trading for 0.3 cents per share
Xstate Resources (XST) has purchased a 15 per cent working interest in an oil asset, Red Earth, in northern Alberta, Canada.
The Red Earth asset includes six oilfields and has 160 producing wells. The asset is majority-owned by Blue Sky Resources (55 per cent), with Sacgasco (SGC) holding 30 per cent of the project.
The company will purchase the interest for CAD$300,000 cash (A$320,000) and A$175,000 worth of shares. Currently, a CAD$30,000 (nearly A$32,000) deposit has been placed to an accountant for the purchase.
Over the past 30 years, cumulative oil produced at Red Earth has been around 63 million barrels with a low 10 per cent base decline rate. Oil at the project is described as a sweet light oil with an average quality of 39 degrees American petroleum institute (API).
Managing Director David McArthur says the purchase takes Xstate from an explorer to an oil producer.
“We have purchased a meaningful portion of these productive fields at a very modest price. The fields are considered mid-life, with the potential to increase and extend their production,” he said.
“We look forward to working with the new operator, Blue Sky, who are active and experienced in the region,” he added.
Xstate said it will continue to look for further asset opportunties that meet its criteria.
On market close for the weekend, Xstate is down 14.3 per cent and is trading for 0.3 cents per share.