Strategic relationship that assists Xstate’s future growth ambitions
• Xstate is pleased to advise it has entered into a strategic alliance with a TSX listed company
• Under the terms of the Strategic Alliance the Parties have agreed to jointly pursue oil and gas acquisitions onshore Canada and USA
• The strategic alliance is advantageous for Xstate shareholders as both Parties will be joining forces to access larger field acquisitions
Xstate Resources Limited (ASX: XST) (“Xstate” or “the Company” is pleased to announce that it has executed a strategic relationship with Hillcrest Petroleum Ltd (“Hillcrest” to jointly pursue oil and gas acquisitions in onshore Canada and USA (“North America”.
Under the Strategic Alliance, Xstate and Hillcrest (the “Party(ies)” and/or “Partner(s) ” will offer acquisition opportunities to each other in North America. Should a Partner elect to pursue one or more of the acquisition opportunities, the originating Party will facilitate the acquisition on behalf of the Partners, operate the acquired assets under joint venture agreements and implement field development plans intended to maximize the market value of the acquired assets with capital funding provided by the Partners.
Xstate is pleased to have Hillcrest as a strategic partner. Hillcrest’s management team has a proven track record acquiring, developing and exploiting oil and gas assets in North America. Importantly Xstate and Hillcrest are aligned in their strategic objectives for creating shareholder value. Both Companies’ core focus is on conventional oil and gas assets onshore with activities directed toward the acquisition, development and management of oil and gas assets with material upside.
The Parties believe the most interesting deals are those with multiple avenues for potential growth, ranging from lower-risk facilities improvements, wellbore optimization and bypassed pay opportunities to development drilling, exploration and lease expansion.
Often the 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.
As a result of this transaction Xstate will develop on the ground operational capability and 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.
The strategic relationship is based on mutual cooperation and assistance in order to support the growth of the respective Partners onshore North America. It’s the intention of Xstate and Hillcrest that the Alliance will be the primary investment vehicle for material investments by either Party in the North American oil and gas industry. Xstate will support future investment by Hillcrest and vice versa Hillcrest will support future investments made by Xstate onshore North America. The Parties will use reasonable endeavours to include each other in investment opportunities where it is in the best interest of both Companies shareholders as a whole.
The Board of Xstate welcomes the formalization of a strategic relationship with Hillcrest that supports Xstate’s future growth opportunities. We look forward to a closer relationship with Hillcrest and its support for the continued growth of Xstate for the benefit of all shareholders
is pleased to announce that it has executed a strategic relationship with Hillcrest Petroleum Ltd (“Hillcrest”
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