Key Highlights

  • Conditional agreement to acquire seven previously producing wells, a saltwater disposal facility and about 400 acres in Noble County, Oklahoma.
  • The purchase price is US$225,000 plus assumed plugging, abandonment and restoration obligations; a US$22,500 deposit has been paid.
  • Recompletions are estimated at US$150,000 per well, against about US$650,000 to drill a new well.

AXP Energy Limited (ASX:AXP) announced on 9 October 2026 a conditional agreement to acquire seven previously producing oil and gas wells and associated infrastructure adjoining its Edwards Lease in Noble County, Oklahoma. The vendor is Vertical Petroleum Industries LLC.

Assets and terms

On completion, AXP will hold a 100% working interest and an approximate 80% net revenue interest across about 400 acres. The wells were drilled within the last seven years and are equipped with pump jacks, rods and tubing. The package includes a tank battery, oil and gas separators, a gathering system, a gas sales point, saltwater disposal lines and a saltwater disposal (SWD) well. The price is US$225,000 plus assumption of plugging, abandonment and restoration obligations, subject to adjustments, due diligence and completion conditions.

Recompletion program

The seven wells were completed in lower formations. AXP plans to recomplete them in the Mississippian Lime, estimating US$150,000 per well or US$1.05 million in total. It compares that with about US$650,000 to drill and complete a new well, implying potential capital savings of US$500,000 per well or US$3.5 million across the seven, before acquisition, connection, infrastructure and remediation costs.

Link to existing leases

Planned connection of the Charlie #1 well to the acquired SWD facility is expected to support improved water management and potentially enhanced production. With the addition, AXP's Oklahoma lease holdings grow to about 1,800 acres with more than 30 potential drilling locations. Gas from successful recompletions could also support expansion of the company's gas-to-power operations.

Company profile

AXP Energy is an oil and gas production and development company with operations in Colorado and Oklahoma, and it trades on the ASX and over the counter in the United States. The acquired wells adjoin the Edwards Lease. Wells were previously completed in lower formations, and the company plans to target the Mississippian Lime. The vendor is Vertical Petroleum Industries LLC, and the assets sit in Township 24 North Range 1 East within Sections 1, 2 and 11 of Noble County.

Sector backdrop

Small producers in Oklahoma often work existing wellbores through recompletions, which can cost less than drilling new wells because surface equipment and wellbores are already in place. Saltwater disposal capacity is an important operating consideration in the state because oil wells produce water alongside hydrocarbons. Acquisitions of previously producing wells commonly include obligations to plug and restore sites at the end of production life, and these can be assumed by the buyer as part of the price. Oil and gas prices affect the economics of any recompletion program, as they determine the cash flow generated by incremental production.

Wells, formation and economics

The seven wells were drilled within the last seven years and were completed in lower formations. Recompletion into the Mississippian Lime is estimated at US$150,000 per well, giving US$1.05 million in total, compared with about US$650,000 to drill and complete a new well. The company notes that its potential capital savings are before acquisition and additional connection, infrastructure or remediation costs. A deposit of US$22,500 has been paid, which is 10% of the US$225,000 price. Successful recompletions could also supply gas to support expansion of the gas-to-power operations.

Risks and uncertainties

The agreement is conditional and subject to adjustments and due diligence. AXP takes on plugging, abandonment and restoration obligations, and the release does not quantify them. Recompletion results are uncertain, and the company states the timing and level of any cash flow will depend on recompletion results and production performance. Savings versus new wells are estimates and exclude other costs.

What to watch next

Completion of the acquisition and due diligence come first, followed by the recompletion program. Cash flow from successful wells is intended to help fund drilling in 2027 across more than 20 potential locations.

Wrapping up

The acquisition is small in price terms and shifts AXP's Oklahoma plan toward lower-cost recompletions of existing wells. Results from those recompletions will determine how the plan develops. Completion conditions and recompletion results will determine the next announcements.