Saxon Oil Co. Ltd.'s Central Kansas Gas Gathering Co. LLC (CKGG) subsidiary is reactivating its 100-mile gas gathering system in central Kansas and will begin delivering natural gas within the next 30 days.
In accordance with the terms of the gas purchase contract, CKGG will deliver up to 2 MMcf/d. Sacon said that revenues from the gathering system should initially increase its gross revenues by as much as 20%.
CKGG acquired the gathering system and associated compression facilities in June 2007. "We're thrilled about reactivating the gathering system," commented Steven D. Moore, president of CKGG. "We've worked hard over the past 12 months preparing to turn on the system and are excited about the revenue, reserves and opportunity this asset will contribute to Saxon."
According to CKGG, many Kansas gas producers and their connecting gas gathering systems, including the system CKGG purchased, were adversely affected in late 2006 by the unexpected shutdown of a major transport system. During the months since purchasing the system, CKGG said it has diligently searched for markets for low-Btu gas in central Kansas before entering into this gas contract. Prior to the gathering system being shut in, the system handled about 600,000 cf/d, all of it coming from third-party producers. The system has an estimated capacity in excess of 5 MMcf/d. Saxon said it plans to increase throughput by drilling and producing gas wells.
Saxon, which bills itself as a Texas-based Canadian company, currently has production totaling more than 245 boe/d from more than 100 wells located in Texas, New Mexico, North Dakota, Oklahoma, and Kansas. In addition, Saxon owns a 20% membership interest in AleAnna Resources LLC, which has a significant acreage position in the Po Valley of Italy.
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