Alberta-based Xfuels Inc. reported Monday that it plans to increase into the USA by including 516 Midcontinent oil and gasoline wells to its holdings.
The brand new belongings come through a letter of intent (LOI) to buy 100% of the widespread inventory of Jubilee Exploration LLC, which controls the wells throughout 10 counties in northeastern Oklahoma and southeastern Kansas. Xfuels mentioned the transaction marks its largest acquisition up to now.
“The Jubilee acquisition will mark a serious milestone for us as we enter the U.S. market,” mentioned CEO Mike McLaren. “We plan so as to add appreciable quantity to Jubilee’s present manufacturing by making use of the identical experience and know-how that has served us nicely in Canada.”
Xfuels mentioned “many” of the Jubilee portfolio belongings “at the moment are low producing or shut in.” Nonetheless, the corporate plans to “convey strategically focused wells again to life” utilizing plasma pulse know-how and different extraction instruments. It famous that it’s going to deal with boosting output from a “core group” of 142 oil and gasoline wells in Craig and Nowata counties, Oklahoma, after it closes the Jubilee acquisition.
Pure gasoline manufacturing from the focused wells might ramp as much as 2,500 Mcf/d inside one yr and better than 7,500 Mcf/d inside two years, Xfuels mentioned.
Along with the Jubilee buy, Xfuels mentioned it could additionally take over 375 pumping models and different equipment and gear. Xfuels plans to accumulate Jubilee as an entirely owned subsidiary in alternate for eight million shares of its widespread inventory and $100,000 in money, together with a 2.5% gross overriding royalty curiosity (GOR), Xfuels acknowledged. The corporate added that the GOR, capped at $1.5 million, can be payable on all petroleum, pure gasoline liquids and pure gasoline mineral pursuits produced by the wells included within the buy.
Moreover Xfuels, different corporations revealing Midcontinent acquisitions in latest months have included Diversified Vitality Co. and BCE-Mach III LLC.