American Patriot Oil & Gas (ASX: AOW) is all smiles after reporting a significant boost in revenue numbers off the back of recent oil and gas acquisitions in the US.
In a monthly activities report released to the bourse, the Melbourne-headquartered company announced monthly production results for November had totalled 2,993 barrels of oil. Record monthly production stood at 300bbl of oil per day.
The production results generated US$194,098 for American Patriot, marking a ten-fold increase from the recent September quarterly results.
The production and associated revenue figures for November represent the first results following the closing of the Peak Energy and Magnolia and Burnett acquisitions in mid-October.
The acquisitions significantly added to the company’s leasehold across Texas and the US Gulf Coast.
Commenting on the significance of today’s news, American Patriot chief executive officer Alexis Clark told Small Caps 2018 had been a fundamentally transformational year for the company.
“It’s extremely satisfying to now see the production and revenue flowing in and it’s only going to grow ever higher in the coming months as we undertake our capital expenditure program to further grow production,” he said.
While crude oil prices are hovering below US$48 per barrel, Clark said the company was currently benefiting from higher gas prices given 66% of overall asset production is gas, not oil.
“We modelled the gas acquisitions on US$2.90 per million cubic feet and gas prices are averaging US$3.80/mcf,” he said.
Production boost forecast for 2019
With revenue streaming in, Clark said there was significant production upside in the pipeline for 2019.
“It’s just the beginning for us because we have the acquisition of Foothills Resources being finalised in January and there are other deals in the pipeline set to close next year, so we could see a doubling or even tripling in our production over the course of 2019,” he said.
American Patriot first announced it had signed a purchase and sale agreement to acquire 100% of the US conventional oil and gas assets of private company Foothills Resources for US$15 million in July.
One finalised, the acquisition gives the company access to the Goose Creek oilfield and Foothills project. The latter is adjacent to American Patriot’s existing Goose Creek and Lost Lake assets.
With the company’s capex program recently kicking off, American Patriot is confident of boosting its production base over coming months.
The program consists of several low capex workovers and equipment repair operations.
On the Peak energy asset, American Patriot has commenced work to restart the Henry foster which is expected to be back online at the end of this week following a tubing issue.