AXP adds seven Oklahoma wells with Mississippian Lime upside

Seven Oklahoma wells acquired at a low entry cost

AXP Energy Limited (ASX:AXP) is pursuing a low-cost expansion of its Oklahoma oil and gas position, agreeing to buy seven previously producing wells and associated infrastructure for US$225,000. The conditional deal also covers approximately 400 acres adjoining AXP’s Edwards Lease, taking the company’s Oklahoma holdings to about 1,800 acres with more than 30 potential new drilling locations.

The assets come with pump jacks, production rods and tubing, a tank battery, oil and gas separators, gathering systems, a gas sales point and a saltwater disposal facility. AXP would acquire a 100% working interest and an approximate 80% net revenue interest in the project in Noble County, subject to due diligence, title review and other completion conditions.

Recompletion economics hinge on the Mississippian Lime

AXP plans to recomplete the seven wells in the Mississippian Lime formation, rather than drill new wells. Each recompletion is estimated to cost US$150,000, or US$1.05 million across the portfolio, compared with the company’s estimate of approximately US$650,000 to drill and complete a new well.

That creates a headline capital difference of roughly US$500,000 per well, or US$3.5 million across seven wells, before acquisition costs, connection work, infrastructure spending and remediation. The wells were previously completed in a lower formation and, according to AXP, have not produced from the Mississippian Lime. Actual value will therefore depend on technical assessments, final work scopes, contractor pricing and production results rather than the cost comparison alone.

Charlie #1 connection could improve water handling

The acquired saltwater disposal facility is also relevant to AXP’s existing operations. The company plans to connect Charlie #1 to the nearby facility, intending to provide an integrated route for produced water and support production optimisation at the Edwards Lease. That proposal follows the Charlie #1 flow test, which delivered an operating-rate equivalent of approximately 55 barrels of oil equivalent per day during a controlled 10-day test, although longer-duration production data and water-handling upgrades were still needed.

AXP also says gas from successful recompletions could support an expansion of its gas-to-power operations. The existing separators and gathering infrastructure may provide a basis for recovering gas for onsite generation, building on the Charlie #1 gas-to-power project. Any expansion remains dependent on gas volumes, quality and pressure, equipment suitability, connection requirements and approvals.

Completion and abandonment costs remain key variables

The purchase price is subject to customary adjustments, with a US$22,500 deposit credited at completion. Completion is targeted for on or before 3 November 2026, but the agreement remains conditional and may be extended by mutual consent.

More materially, AXP will assume plugging, abandonment and surface restoration obligations for the seven wells. The announcement leaves the aggregate estimate as “US$[insert]”, meaning an important liability has not yet been quantified in the disclosed terms. The recompletion program is also subject to funding, equipment condition, disposal capacity, regulatory requirements and the results of technical work. A successful restart could help fund further drilling in 2027; the filing does not provide production forecasts or guarantee that outcome.