Xstate teams up with Hillcrest in North American hunt
PERTH (miningweekly.com) – ASX-listed Xstate Resources has struck a deal with TSX-listed Hillcrest Petroleum to jointly hunt for oil and gas acquisitions onshore Canada and the US.
Xstate told shareholders that the alliance will be the primary investment vehicle for material investments by either party in the North American oil and gas industry, with Xstate to support future investment by Hillcrest, and vice versa.
The parties would use ‘reasonable endeavours’ to include each other in investment opportunities where it would be in the best interest of both companies, Xstate said.
“The parties believe that the most interesting deals are those with multiple avenues for potential growth, ranging from lower-risk facilities improvements, wellbore optimisation and bypassed pay opportunities to develop drilling, exploration and lease expansion,” said Xstate MD Cosimo Damiano on Tuesday.
“Often the best projects have an element of each, so if one is not working, there are other ways to create value, thus building value in oil and gas is often an incremental process.
“It is vitally important when working in North America for joint venture interests to be aligned. Xstate will have the opportunity to work with an experienced management team who has partnered with a sophisticated financial investor. The joint venture will benefit from each partner’s management teams' past activities in North America, scaled balance sheet capacity to access larger field acquisitions, providing economies of scale in operating costs and production operations.”
Damiano said that as a result of this transaction, Xstate will develop on-the-ground operational capability and would gain access to commercially aligned operational relationships in Canada, which will enable the identification, purchase and enhancement of additional production opportunities in line with the company’s investment strategy.
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