OKLAHOMA CITY: AXP Energy Limited announced Friday it has entered a conditional agreement to acquire seven previously producing oil and gas wells and associated infrastructure on approximately 400 acres in Noble County, Oklahoma, adjoining its existing Edwards Lease.

The Australian oil and gas producer, listed on the ASX, will pay US$225,000 for the assets from Vertical Petroleum Industries LLC, plus assume plugging, abandonment and surface restoration obligations. A US$22,500 deposit has been paid.

The deal, subject to due diligence and completion conditions, is expected to close on or before Nov. 3.

Re-completion program planned

The seven wells, drilled within the past seven years, were completed in lower, less productive formations, according to the company. AXP plans to re-complete them in the Mississippi Lime formation at an estimated cost of US$150,000 per well, or about US$1.05 million total.

By comparison, drilling and completing a new well costs approximately US$650,000, the company said, representing potential capital savings of US$500,000 per well.

“These wells have never produced from the Mississippi Lime formation and that is our opportunity,” said Daniel Lanskey, AXP’s managing director and CEO. “Successful re-completions could generate earlier cash flow to help fund further development drilling during 2027.”

Infrastructure included

The acquisition includes pump jacks, production rods and tubing on each well, a saltwater disposal well facility, tank battery and storage, oil and gas separators, a gathering system, a gas sales point and SWD lines.

AXP said it also plans to connect its Charlie #1 well to the acquired saltwater disposal facility to improve water management and potentially enhance production at the Edwards Lease.

Gas produced from successful re-completions could support an expansion of the company’s gas-to-power operations, AXP said.

Lease holdings grow

Following completion, AXP will hold a 100% working interest and approximately 80% net revenue interest in the project, located in Township 24 North, Range 1 East, Sections 1, 2 and 11.

The company’s Oklahoma lease holdings will grow to approximately 1,800 acres with more than 30 potential new drilling locations.

AXP holds a 100% working interest and 81.25% net revenue interest in the Hawk and Edwards leases in Kay and Noble counties prior to the acquisition.

Program timing remains subject to technical assessment, funding, equipment condition, disposal capacity and regulatory requirements.