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Marksmen Signs LOI With Axiom for Alberta Wells, Farm-In
Marksmen Energy signs non-binding LOI with Axiom Oil and Gas for workovers on 15 suspended Alberta wells and a potential 15-25 well farm-in program in exchange for a gross overriding royalty and working interest.
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Marksmen Energy Inc. has signed a non-binding letter of intent with private operator Axiom Oil and Gas Inc. to form a strategic alliance for oil and gas development in Alberta. The junior producer, active primarily in the Appalachian Basin, will use proceeds from a previously announced private placement of up to $1.38 million to fund workovers on roughly 15 suspended Axiom wells.
Under the LOI, Marksmen will earn a gross overriding royalty in a property operated by Axiom, potentially at Harmattan, in exchange for funding service rig and pipeline work to restore production. Axiom will manage and supervise the workover program using its existing operating and technical team.
Marksmen is also evaluating a farm-in opportunity on Axiom lands where the technical team has identified about 50 potential horizontal oil development locations. Subject to technical and economic evaluation, financing, and definitive agreements, Marksmen could earn an 80% to 85% working interest in new wells by funding 100% of drilling, completion, equipping, and tie-in costs. The parties currently envision an initial development program of 15 to 25 wells, with scope and timing dependent on technical results, commodity prices, and available capital.