American Patriot Oil & Gas Limited Provides Deal Update

Source Press Release
Company American Patriot Oil & Gas Limited 
Tags Asset Deals, Deals, Shale Oil, Shale Gas, Haynesville-Bossier, Unconventional Resources, Upstream Activities
Date September 27, 2018

American Patriot signed the purchase and sale agreement in February 2018 to acquire additional conventional oil and gas assets in East Texas.

Due diligence has been completed on the asset and we have decided to combine this transaction with two other acquisitions which are currently in negotiation and to close all three deals at one time which is expected to occur in the end of September. The asset consists of 37 barrels of oil a day and 440 mcfd of gas production (110 boepd) with significant upside potential. The asset contains 1,100,000 barrels of oil equivalent proven oil and gas 1P reserves certified by independent reserve reports.

These reserves have been acquired for US$2.2m and are estimated to have the potential to generate USD$20m revenue over a period of time. The reserve study has been conservatively valued at US$50/bbl oil prices vs current market prices of US$65/bbl. The assets have been acquired from a number of private oil and gas companies. The Company has already completed an independent reserve report and full engineering study on the assets with land title and environmental work completed. Operating costs in this region are approximately US$23/bbl so the wells are economic down to a low oil price.

Importantly all infrastructure including pump jacks, tanks and batteries is in place, with ready access to market through gas pipeline and delivery to nearby refineries. The asset requires minimal workover expenditure to increase the production in the field. American Patriot will be operator of the asset with the current owner assisting with the process.

The fields acquired in this transaction are located in Harrison, Gregg, Rusk and Upshur Counties, Texas. The fields are mature legacy assets with current daily production of 37bopd oil and 440mcf/d gas production, with significant proven behind pipe pay and infill drilling opportunities that has not yet been exploited. American Patriot expects to be able to grow production significantly for minimal capital expenditure. There are more than 38 producing wells over 43 leases with an average NRI of 76%. Estimated reserves are 400,000 bbls oil and 4 bcf gas.

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