AXP Energy Confirms Commencement of Gas Sales in Colorado

AXP Energy Limited confirms that natural gas sales from its Colorado lease operations have now commenced.

The natural gas is being used for the in-situ power generation of the Elite Mining Units (EMU) installed by US-based Elite Mining Inc – refer images overleaf.

The gas sales agreement between AXP and Elite provides for the delivery of natural gas sourced from AXP's Pathfinder #2 well ('Pathfinder') to Elite (refer ASX announcement dated 15 February 2022) which is now operating the first two EMUs. 

An additional gathering line from the Amerigo Vespucci well has also been installed to ensure that sufficient volumes of gas are supplied as Elite's operations increase at the Colorado site.

The sale of natural gas to Elite follows an extensive period of collaboration between AXP and Elite. It also marks an important step forward for AXP by establishing an operating framework to further grow revenues from its Colorado oil and gas operations.

Natural gas supplies to Elite are expected to initially average around 200 Mcf per day which will provide an additional revenue stream for AXP from its Colorado assets in the current quarter.

Strategically, the agreement allows AXP to extract otherwise stranded oil and gas in accordance with environmental regulations as it does not entail any gas flaring arrangements which are often associated with oil extraction.

With no requirement to flare gas, this project is a foundation for further monetisation of the Company's Colorado asset.

Pathfinder and Amerigo Vespucci were specifically chosen to ensure that sufficient volumes of gas are available for supply and because they are best placed to contribute to increased oil production from the lease.

More than 10 barrels of oil per day is already flowing from the Pathfinder well with the first two EMUs in operation and production is expected to continue to increase as further gas is required once the the 3^rd EMU commences operations and production stabilizes.