ELIXIR PETROLEUM LIMITED (ASX: EXR) has two new high impact exploration projects in Mongolia and Alaska in its portfolio on which the company has exclusive options. The company wins as an apparent highest bidder on 114,310 acres (10 leases) on the prolific and highly prospective Alaskan North Slope.
The new leases complement and are adjacent to Elixir’s existing 35,423-acre lease position. It is maintaining a trend with recent large oil discoveries made by ConocoPhillips. These are subject to an option agreement with Entek Energy Limited, which has the power to use option to acquire Elixir’s Alaskan portfolio for up to 200 million Elixir shares.
Elixir has paid a 20% deposit of approximately US$225,000. This will be subject to an increase in value by 25% if Entek decides to exercise its option to acquire Elixir’s Alaskan portfolio.
Elixir as well as Entek are jointly working towards the potential completion of the transaction by Q1 of 2019. The company also secured additional leases in Alaska which is a crucial milestone for them.
As per the proposed transaction between Entek and Elixir, shareholders will receive approximately one share in Entek for every two shares held in Elixir.
Elixir maintains a corporate strategy to acquire high impact exploration projects which meet the following objectives:
- low-cost exploration opportunities with moderate geological risks.
- early stage exploration sites.
- oil & gas projects which are conventional and unconventional in nature with distinct monetization outcomes.
- working on multiple well-drilling programs.
- managing risks and grow its portfolio by executing farm-in and farm-out agreements.
- entering into strategic partnerships for the development of several projects to leverage its opportunities.
- standing out unique in the application of a combination of technical excellence, commercial
- innovation and speed & flexibility to access new opportunities and growth.
Over the past 18 months, Elixir has been actively pursuing its acquisition of Golden Horde Limited together with other new venture opportunities. These ventures have potential in terms of the scale and leverage to attract the necessary exploration capital to mature assets of a similar nature.
This, however, compelled a shift in focus from locations such as the Lower 48 of the United States, where there is fierce competition for good quality assets. This increased competition is a result of the unconventional shale revolution which currently dominates the industry in North America. The recent increases in oil price have also attracted significant new investment in these areas. On December 3, 2018, however, the company successfully exercised its option to acquire the Golden Horde.
Elixir’s stock is currently trading $0.035 with a market capitalization of 10.35 million. The stock has achieved a 52-week trading high $0.111 and a low of $0.035 respectively. The stock has produced a negative return over a span of one year with a YTD return of -44.82% and a negative return of -35.18% over the period of last six months.
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