AXP Energy Faces Operational Challenges Amid Ambitious Gas-to-Power Expansion

Gas-to-Power Trial Marks a Milestone

AXP Energy Limited (ASX: AXP) has successfully completed a 60-day gas-to-power trial at its 100%-owned Pathfinder Field in Colorado, delivering 1.5 MW of off-grid power. This trial represents a significant operational milestone as it marks the first time natural gas from the company’s Colorado leases has been monetised. The trial generated maiden natural gas revenue at an equivalent price of $4 per thousand cubic feet (mcf), notably above the Henry Hub spot price, reflecting the premium value of in-situ power generation for its bitcoin mining customer.

During the trial, gas was used to fuel two 750 KW natural gas generators powering Blackhart Technology’s Modular Data Centres (MDCs), which house 522 ASIC miners running at 45 PH/s to mine Bitcoin. The operation achieved an uptime exceeding 80%, demonstrating technical reliability and operational viability.

Scaling Up with Strategic Partnerships

Building on this success, AXP is aggressively expanding its gas-to-power operations, targeting 5 MW of power generation by the end of June 2025 and aiming for 25 MW by December. The company has secured the backing of NASDAQ-listed BitFuFu, Inc (NASDAQ: FUFU), a notable player in the bitcoin mining sector, to support the next phase of expansion at Pathfinder Field. Representatives from BitFuFu have visited the site and expressed ongoing support, signaling confidence in AXP’s strategy to integrate energy production with high-performance computing applications.

Preparations are also underway at the J W Powell site for the installation of a 750 KW generator by June, which will connect to additional MDCs, further scaling the company’s off-grid power solutions tailored for data centre operators.

Operational and Financial Overview

For the quarter ended 31 March 2025, AXP reported gross oil production of 2,430 barrels, a 10% decline from the previous quarter attributed to winter weather conditions. Gas production reached 13,313 MCF, contributing to the company’s first natural gas sales from its Colorado leases. Oil inventory stood at 1,580 barrels at quarter end.

Financially, the company recorded revenue of $134,716, broadly consistent with the prior quarter, supported by oil sales and the initial gas-to-power revenue stream. Operating cash outflow increased to $558,949, reflecting ongoing regulatory, corporate, and project-related expenditures. However, cash and cash equivalents improved to $230,811, bolstered by a $705,413 share placement and anticipated inflows including a $300,000 federal tax refund and bond deposit returns totaling over $300,000.

Leadership Strengthening and Strategic Focus

AXP has reinforced its leadership team to drive its growth ambitions. Dan Lanskey was appointed Managing Director and CEO, bringing active involvement in the gas-to-power project development and exploration of expansion opportunities. James Dack joined as a Non-Executive Director, adding extensive experience from the Australian property sector and government roles.

These appointments coincide with the company’s pivot towards integrating stranded gas resources with bitcoin mining and data centre power solutions, positioning AXP at the intersection of energy production and emerging high-performance computing demands.

Looking Ahead

AXP is advancing work on three wells to boost oil production and stabilize gas flows, ensuring reliable power supply for its customers. The company anticipates further revenue growth from ongoing oil production and expanded gas-to-power operations. With no debt on its balance sheet and additional funds expected from tax refunds and shareholder-approved equity injections, AXP appears financially positioned to execute its ambitious development plans.