AXP Energy set to be the sole owner of Kentucky Exploration leases

Author : John Smith | Published On : 25 Nov 2021

Oil & gas player AXP Energy Limited (ASX:AXP|OTC:AUNXF) is on its way to acquiring the entire 100% stake in Kentucky Exploration, LLC, which holds extensive acreage in the Illinois Basin. AXP has been operating Kentucky Exploration’s leases in a joint venture (50-50) with Australian private company Newtak Pty Ltd since 2010. In a significant development, the Company has agreed terms with Newtak to acquire its 50% interest in Kentucky, thereby owning the leases outright and retaining sole operatorship.

Third acquisition in one year:
For the 50% interest owned by Newtak, AXP will make a cash consideration of US$50,000. The low-cost, opportunistic acquisition is anticipated to close by November 2021 end. The AXP-Newtak JV was formed in 2010 and the agreement covered the equal sharing of revenues and royalty payments between the two parties. Notably, this is the Company’s third acquisition in the last one year. AXP has been on an acquisition spree since last year, starting with Trey Exploration , followed by MHP.

AXP’s Asset Portfolio: AXP has a total of 1,460 wells under its 100%-controlled projects. Of the total, ~276 has been identified for abandonment or are under review. The Company estimates that out of these, a number of them will go for re-purposing and workover operations.  

Kentucky Exploration LLC: 
Kentucky Exploration LLC holds an oil & gas acreage in the prolific Illinois Basin,  has 44 conventional oil wells, which are currently delivering modest daily production.The Company has developed a workover program to boost the production, with some wells already returning.

Hailing the acquisition, Mr Tim Hart, CEO of AXP Energy, highlighted that the Kentucky Exploration leases were “proven oil producing fields” and that the Company had identified some “compelling low-cost conventional targets”. He added that several wells had been shortlisted for extensive workovers to enhance production.  

 “This low-cost, opportunistic acquisition of an asset we know well is further evidence of our ability to identify quality conventional oil and gas assets and add value quickly. We look forward to providing an update on the workovers and the early production gains,” Mr Tim Hart added.

Recently, AXP informed about 90% completion of the KayJay pipeline repair project and nearly 500Mcf/d of average production. The volume is slated to rise to 550Mcf/d once the repair project is 100% complete.

AXP expects a significant rise in oil & gas production in the near future, backed by workovers and drilling new low-cost conventional oil wells. 
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