Sacramento Basin Gas Update Acquisition of Additional ... located nearby the Company’s existing...
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ABN 96 009 217 154 Level 2, 55 Carrington Street, Nedlands WA 6009 | Tel + 61 8 9423 3200 | Fax +61 8 9389 8327 www.xstate.com.au 29 March 2017 ASX Limited Electronic lodgement Sacramento Basin Gas Update Acquisition of Additional Leases with associated Production and Facilities • Xstate has exercised its option from Sacgasco to acquire various working interests ranging from 10-30% of wells in five producing gas fields. • Modest upfront cash consideration and the assumption of future well abandonment liabilities. • The acquisitions materially add to current gas production and include strategically located infrastructure, gas processing plants, meter stations and pipelines adjacent to existing producing assets. • Doubles the lease area over multi-Tcf Dempsey Natural Gas Prospect. Xstate Resources Limited (ASX:XST) (“Xstate” or “the Company”) is pleased to confirm that it has exercised its option to acquire various working interests from Sacgasco Limited (“Sacgasco” or “SGC”) in five gas producing fields that significantly strengthen the joint ventures asset base in the Sacramento Basin, California. The Company has agreed to acquire between 10-30% of Sacgasco’s working interest in five producing gas fields that Sacgasco sourced and negotiated on behalf of the joint venture partners. The assets are located nearby the Company’s existing production in the Sacramento Basin onshore northern California. The assets include all associated leases, production and facilities, including meter stations and pipelines in five gas fields, and access to proprietary 3D seismic data over 41 square kilometres, including several attractive mapped prospects for conventional natural gas. Access to these new assets adds diversity and therefore de-risking to the Company’s conventional natural gas asset base in the Sacramento Basin. Importantly in the near term the two acquisitions will add materially to Xstate’s current gas production from Rancho Capay and Los Medanos Gas Fields. After this acquisition, Total Gross Production will be approximately 900 mcf per day. In total, the joint venture now has a portfolio of 25 natural wells in the Sacramento Basin with 10 in production and a further 15 wells that have the potential to be brought back into production. All production assets have material infrastructure, which can be used in the event of exploration success. The operator has advised the potential drilling of the Dempsey well in the coming months. Xstate’s working interest in all it natural gas wells ranges from 10 to 30% and Net Revenue Interests (after Royalties) are in the range of 68% to 83% (of 100%). The Company looks forward to providing shareholders with further updates in the near term as development, production & exploration strategies are progressed. For personal use only
Transcript of Sacramento Basin Gas Update Acquisition of Additional ... located nearby the Company’s existing...
ABN96009217154
Level2,55CarringtonStreet,NedlandsWA6009|Tel+61894233200|Fax+61893898327www.xstate.com.au
29March2017ASXLimited Electroniclodgement
SacramentoBasinGasUpdateAcquisitionofAdditionalLeaseswithassociatedProductionandFacilities
• XstatehasexerciseditsoptionfromSacgascotoacquirevariousworkinginterestsrangingfrom10-30%ofwellsinfiveproducinggasfields.
• Modestupfrontcashconsiderationandtheassumptionoffuturewellabandonmentliabilities.
• The acquisitions materially add to current gas production and include strategically locatedinfrastructure, gas processing plants, meter stations and pipelines adjacent to existingproducingassets.
• Doublestheleaseareaovermulti-TcfDempseyNaturalGasProspect.
Xstate Resources Limited (ASX:XST) (“Xstate” or “the Company”) is pleased to confirm that it hasexerciseditsoptiontoacquirevariousworkinginterestsfromSacgascoLimited(“Sacgasco”or“SGC”)in five gas producing fields that significantly strengthen the joint ventures asset base in theSacramentoBasin,California.
TheCompanyhasagreedtoacquirebetween10-30%ofSacgasco’sworkinginterestinfiveproducinggasfieldsthatSacgascosourcedandnegotiatedonbehalfofthejointventurepartners.Theassetsare located nearby the Company’s existing production in the Sacramento Basin onshore northernCalifornia.
The assets include all associated leases, production and facilities, including meter stations andpipelines in five gas fields, and access to proprietary 3D seismic data over 41 square kilometres,includingseveralattractivemappedprospectsforconventionalnaturalgas.
Access to thesenewassets addsdiversity and thereforede-risking to theCompany’s conventionalnaturalgasassetbaseintheSacramentoBasin.Importantlyintheneartermthetwoacquisitionswilladdmaterially toXstate’scurrentgasproduction fromRanchoCapayandLosMedanosGasFields.Afterthisacquisition,TotalGrossProductionwillbeapproximately900mcfperday.
Intotal,thejointventurenowhasaportfolioof25naturalwellsintheSacramentoBasinwith10inproduction and a further 15wells that have the potential to be brought back into production. Allproduction assets have material infrastructure, which can be used in the event of explorationsuccess.TheoperatorhasadvisedthepotentialdrillingoftheDempseywellinthecomingmonths.
Xstate’sworkinginterestinallitnaturalgaswellsrangesfrom10to30%andNetRevenueInterests(afterRoyalties)areintherangeof68%to83%(of100%).
The Company looks forward to providing shareholders with further updates in the near term asdevelopment,production&explorationstrategiesareprogressed. F
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Sacramento Basin Gas Update
Level2,55CarringtonStreet,NedlandsWA6009|Tel+61894233200|Fax+61893898327www.xstate.com.au
NewProjectAreas-Xstate30%workinginterest
WorkingInterestsin13WellswereacquiredbySacgascofromABAEnergy.Themajorityofthewellsare located near the Company’s existing production in the Sacramento Basin, onshore northernCalifornia.UnderthetermsoftheacquisitionXstatehasagreedtopayamodestsumofUS$21,000toacquireitsworkinginterestof30%.
The assets include all associated leases, production and facilities, including meter stations andpipelines in three gas fields, and access to proprietary 3D seismic data over some 41 squarekilometres,includingattractivemappedprospectsforconventionalnaturalgas
Currentgross(100%)productionfromjustthreewellsisaround520mcfgasperday.Theoperatoradvises there are a number of opportunities to bring other wells back into production throughworkovers and/or new pipeline connections for modest expenditures. This will add materially toXstate’scurrentgasproductionfromRanchoCapayandLosMedanosGasFields.
Xstate will assume its share of future liabilities for plugging the wells acquired, and removingassociated facilities,estimated tobeUS$20,000 to$60,000perwell gross,andwhichwilloccuratsomeundeterminedfuturetimethat isdependentonoperationaldecisionsonfutureutilisationofthe wells for production, workovers or new drilling. Furthermore, there is a small royalty notexceeding3%onproductionfromexistingandfuturewells intheleaseareasandmodestprospectfeesarealsotobepaidonrelatedgasprospectsthatmaybedrilledinthefuture.
Figure1:LocationmapofXstate’sSacramentoBasinProjects
AcquiredAssetsHighlightedinRed–ABAEnergy
Figure2:MeterStation
Figure3:GasProductionFacility
Source:SacgascoLimitedASX,February7th,2017
Gary Jeffery Ben Jarvis Managing Director Six Degrees Investor Relations +61 8 9388 2654 +61 413 150 448 Sacgasco Limited Company Background
Sacgasco Limited (ASX: SGC) is an Australian-based energy company focused on conventional gas exploration in the Sacramento Basin, onshore California. SGC has an extensive portfolio of oil and gas prospects at both exploration and appraisal stages, including a number of multi-Tcf opportunities. The Company is targeting gas supply to the local Californian gas market and burgeoning LNG market in North America. SGC is of the view that the size of the prospects in California have the potential to supply both the domestic Californian gas market and export LNG markets.
www.sacgasco.com
Twitter: @SacGasCo
Fig 1: Location of SGC Sacramento Basin Projects Acquired Assets Highlighted in Red
Fig 2: Fig 3: SGC Sacramento Basin Meter Station SGC Sacramento Gas Production Facility
Fig 2: Fig 3: SGC Sacramento Basin Meter Station SGC Sacramento Gas Production Facility
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Level2,55CarringtonStreet,NedlandsWA6009|Tel+61894233200|Fax+61893898327www.xstate.com.au
DempseyProspectArea–Xstate10%workinginterest
TheDempseyProspectAreaacquisitioncomprisesleasesandgasproductioninfrastructureacquiredaboveoradjacenttothemappedDempseyNaturalGasProspect,andisahighlystrategicadditiontotheCompany’sleaseholdingsintheprolificSacramentoBasin.
Thejointventurehasacquiredthepropertiesinreturnforassumingfutureliabilitiesforpluggingthewells,andremovingassociatedfacilities,estimatedtobeapproximately$50,000perwellgross.Thiswilloccuratsomeundeterminedfuturetimethat isdependentonoperationaldecisionsonfutureutilisationofthewellsforproduction,workoversornewdrilling
The assets also include all associated leases, production facilities, including meter stations andpipelines in two gas fields Rancho-Capay, adjacent to existing production and East Rice CreekGasField,immediatelynorthofRancho-Capay.
Currentgross(100%)productionfromjusttwowells inthelatestacquisitionisaround120mcfgasperday.Thereareopportunitiestobringotherwellsbackintoproductionthroughworkoversand/oralternativegasgatheringpipelineconnectionsformodestexpenditures.
SacgascowilloperatealloftheacquiredwellsunderitscurrentserviceagreementwithDeroParker’sIntegrityManagementServices.
TheeffectivedateforbothacquisitionswasFebruary1,2017.
Figure1:LocationmapofXstate’sSacramentoBasinProjects
AcquiredAssetsHighlightedinRed–DempseyProspectArea
Source:SacgascoLimitedASX,March20th,2017
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Sacramento Basin Gas Update
Level2,55CarringtonStreet,NedlandsWA6009|Tel+61894233200|Fax+61893898327www.xstate.com.au
XSTATERESOURCESLIMITED–SACRAMENTOBASINTENEMENTLIST Projectname Location Working
InterestAlvaresProspect SacramentoBasinOnshoreNorthernCalifornia 21%
DempseyProspect SacramentoBasinOnshoreNorthernCalifornia 10%
CaliforniaAMI SacramentoBasinOnshoreNorthernCalifornia 30%
CaliforniaAMI9Prospects SacramentoBasinOnshoreNorthernCalifornia 24%*
Rancho-CapayGasField SacramentoBasinOnshoreNorthernCalifornia 10%
LosMedanosGasField SacramentoBasinOnshoreNorthernCalifornia 10%
NewProjectAreaAcquisition SacramentoBasinOnshoreNorthernCalifornia 30%#
DempseyProspectAreaAcquisition
SacramentoBasinOnshoreNorthernCalifornia 10%#
*Aftersatisfactionofpreviouslyannouncedfarmout.#GrossWIinterestsacquiredvaryfrom67.5%to100%;XstateWIisofthegrossWIasitappliesfromleasetoleaseandwelltowell.Projectsarecontinuouslyreviewedfortheirstrategicfitandareexpectedtobemodifiedovertimetoreflectindustryconditions.
ForandonbehalfoftheBoardofXstateResourcesLimited
Forfurtherdetailspleasecontact:CosimoDamiano ChrisHodgeManagingDirector NonExecutiveDirectorXstateResourcesLimited XstateResourcesLimitedTelOffice:+61894233200 TelOffice:+61894233200Email:[email protected] Email:[email protected]
XstateResources(ASXCode:XST) isanASX listedcompanyfocusedontheoilandgassector. TheCompanyhasexistinggasexplorationassets located intheSacramentoBasin,Californiaandminorassociatedgasproduction.
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