American Patriot Oil & Gas (ASX: AOW)
American Patriot Oil & Gas (ASX: AOW) is a US onshore oil player that has recently revised its strategy and is now no longer looking for a takeover offer, but in fact has become the acquirer.
AOW is seizing opportunities to collect up a swag of distressed onshore US oil producing assets following recent oil price malaise, on the premise that these assets are strong and cash flow positive now, and as the oil price rebounds, will become even more so.
AOW is set to complete its first acquisition of assets, which a potential value of US$153 million (AU$198M), in an all-stock transaction, escrowed for 18 months.
The Westworld Prospect is cash flow positive at current oil prices, with production expected to ramp up from the current 90 barrels of oil per day to 2000 per day by the end of 2018.
AOW, which has been close to being acquired several times itself, is now on an aggressive path to expand its reserve/resource base, drive efficiencies and build out its assets by restarting production at shut wells.
Westworld is the ideal start, and even with a US$45 oi price, is in line to generate US$90M in revenues from its existing reserve base…
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Through its acquisition strategy, AOW’s long term goal is to build a significant producing business reaching 5000 BOPD by 2019.
Westworld is just the beginning.