On 9 October 2026, AXP Energy Limited (ASX:AXP) announced a conditional agreement to acquire seven previously producing wells and associated production and water disposal infrastructure on about 400 acres adjoining its Edwards Lease in Noble County, Oklahoma.

Acquisition terms

AXP will acquire a 100% working interest and an approximate 80% net Revenue interest from the vendor, Vertical Petroleum Industries LLC. The purchase price is US$225,000 plus assumption of plugging, abandonment and restoration obligations, subject to adjustments, Due Diligence and completion conditions. A deposit of US$22,500 has been paid.

The Assets include seven wells drilled within the last seven years and fitted with pump jacks, rods and tubing, a saltwater disposal (SWD) well facility, a tank battery, oil and gas gathering system and a gas sales point. Following the acquisition, AXP’s Oklahoma lease holdings would be about 1,800 acres with more than 30 potential new drilling locations.

Recompletion plan and cost comparison

The wells were completed in lower formations, and AXP proposes to recomplete them in the Mississippian Lime, at an estimated US$150,000 per well (US$1.05 million for all seven). The company estimates drilling and completing a new well at about US$650,000, implying potential Capital savings of US$500,000 per well, or US$3.5 million across seven wells, before acquisition, connection, infrastructure and remediation costs.

Water disposal, Cash Flow and gas-to-power

AXP plans to connect its Charlie #1 well to the acquired SWD facility, intended to provide an integrated disposal route for produced water and support production optimisation at the Edwards Lease. Successful recompletions could provide earlier cash flow to help fund drilling of new wells in 2027, and gas from them could support expansion of AXP’s gas-to-power operations. The release states any cash flow depends on recompletion results, production performance, Commodity prices and operating costs.

Sector backdrop

Recompleting existing wells in a different formation can cost less than drilling new wells, but results depend on reservoir quality and the condition of the wellbores. Mississippian Lime wells in Oklahoma often produce significant volumes of water, so disposal capacity is a factor.

Acquired wells may carry plugging and abandonment obligations, which are liabilities that transfer to the buyer.

Risks shareholders should weigh

The Acquisition is conditional, subject to due diligence and completion conditions, and adjustments to price. AXP will assume plugging, abandonment and restoration obligations, which may be material.

Recompletion results are unknown. The wells have not been shown to produce from the Mississippian Lime, and the US$150,000 per well cost is an estimate. Infrastructure is described as subject to operational checks.

The release does not give expected production rates or revenue. Successful recompletions are needed before cash flow can support further drilling, and commodity prices and operating costs affect results. AXP will also need funding for the recompletion program.

What’s next

AXP expects to complete due diligence and satisfy completion conditions, then undertake recompletions, connect Charlie #1 to the SWD Facility and consider drilling of new wells in 2027. Shareholders may wish to watch for completion, recompletion results and production rates.