Snapping up underperforming oil and gas assets in Texas may have been the initial target for Xfuels to enter the biz from its native Alberta, but Okla., is soon to become the energy company’s first landing zone. Reese Energy Consulting today is following the latest announcement from Xfuels whose new U.S. subsidiary Cycle Oil and Gas has picked up 516 wells across 10 counties in northeast Okla., and southeast Kans. The stock-and-cash deal with Ardmore, Okla.-based Jubilee Exploration marks Xfuel’s largest acquisition to date and includes 375 pumping stations and a wide range of other equipment valued at $15 million. Most wells are currently low-producing or shut-in, making them ideal to leverage the company’s inhouse well services team and proprietary and licensed technologies to return distressed assets to profitability. First order of business will be to increase gas production from a cluster of 142 Jubilee wells in Okla., to 2.5 MMCFD within a year and 7.5 MMCFD in two. Xfuels expects to achieve revenues between $4.5 and $13.5 million from its Phase I development assuming a market price at or near $5 per MCF.
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