AXP Energy (ASX:AXP) has entered a conditional agreement to acquire seven previously producing oil and gas wells in Oklahoma, US, for US$225,000 ($322,500) plus assumption of plugging and abandonment obligations.
The acquisition includes seven wells equipped with pump jacks, production rods, and tubing. It also includes a saltwater disposal well facility, tank battery, oil and gas gathering system, gas sales point, and disposal lines.
The 161-hectare property adjoins the company’s existing Edwards Lease in Noble County, Oklahoma.
AXP plans to recomplete the seven wells in the Mississippian Lime formation at an estimated cost of US$150,000 per well, totalling US$1.05 million. The wells were previously completed in lower, less productive formations.
“This acquisition offers a low-cost route to potentially increase oil and gas production with recompletions estimated at US$150,000 per well compared with approximately US$650,000 to drill and complete a new well,” CEO Daniel Lanskey says.
“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.”
The company estimates drilling and completing a new well costs about US$650,000, representing potential capital savings of US$500,000 per well through recompletions. Across seven wells, this equates to US$3.5 million in potential savings before acquisition and additional costs.
The transaction includes a 100% working interest and about 80% net revenue interest in the project. Vendor Vertical Petroleum Industries has received a US$22,500 deposit, which will be credited against the purchase price at completion.
AXP plans to connect its existing Charlie 1 well to the acquired saltwater disposal facility to improve water management and potentially enhance production. The company also expects gas from successful recompletions could support expansion of its gas-to-power operations.
Following completion, the company’s Oklahoma lease holdings will grow to about 728 hectares with more than 30 potential new drilling locations. Successful recompletions could generate earlier cash flow to help fund development drilling during 2027.
The agreement provides for completion on or before 3 November 2026, subject to satisfactory due diligence, title review, and completion conditions.
AXP Energy currently holds a 100% working interest and 81.25% net revenue interest in the Hawk and Edwards Leases in Kay and Noble Counties, Oklahoma.
Write to JC Villarba at Mining.com.au
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