American Patriot Acquires Oil Properties for US$20.5 Million

American Patriot Acquires Oil Properties for US$20.5 Million

International oil and natural gas company American Patriot has penned two separate deals for oil and gas assets in Texas. The purchases will strengthen the company’s books and position for 2019.

International oil and natural gas company American Patriot (ASX:AOW) has penned three separate deals for oil and gas assets in Texas. The acquisitions, which are worth US$20.5 million, will strengthen the company’s books and position for 2019.

The purchase will also help the company increase production and output levels.

“This development will see American Patriot become the most significant operator in the region, with potential to introduce a number of new acquisition targets to rapidly build scale and increase production,” said Alexis Clark, American Patriot CEO.

The acquisitions of the Foothills Resources and Magnolia/Burnett assets will add a total of 450 barrels of oil equivalent per day (boepd) to American Patriot’s reserves, and deliver an additional 5.6 million barrels of oil equivalent 2P reserves (90 percent oil) certified by independent reserve reports.

This most recent announcement follows an earlier acquisition in the same area by the company. In February, American Patriot acquired the East Texas oil field, a proven resource that delivers 110 boepd and doubles reserves to 2.1 million barrels of oil equivalent.

The US$2.5 million the company paid is an incredible bargain considering the East Texas field has the potential to generate US$95 million annually.

“Signing the PSA on this transaction continues American Patriot’s transformation into a significant production company with a growing reserve base in a rising oil price environment and demonstrates our ability to execute on our strategy,” Clark said at the time.

“The East Texas acquisition is our largest transaction to date and it has doubled our reserve base and production potential, underpinning the cash flow of the business. Importantly we acquired this asset on the basis of US$50/oil vs current oil prices at US$65 a barrel.”

All in all, with the combination of the Foothills, Magnolia, Burnette and East Texas purchases American Patriot expects to grow its reserves by an additional 6.5 million barrels of oil equivalent at a net production rate of 550 barrels per day.

The increase in production and output will add an additional net cash flow of US$6 million per year to the international company’s coffers.

“Due diligence is currently being completed on assets, which are a multiple of recent acquisitions, and 2018 is looking to be a significant year for American Patriot as we look to build production to well over 2,000 boepd,” added Clark.

American Patriot’s share price was flat on Tuesday (July 24), closing at AU$0.31.

Don’t forget to follow us @INN_Resource for real-time updates!

Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.

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