Marking its second Kansas natural gas gathering action in less than a week’s time, Saxon Oil Co. Ltd. subsidiary Central Kansas Gas Gathering Co. LLC (CKGG) said it has acquired an additional 125 miles of gathering systems in central Kansas, bringing the total network to more than 240 miles effective July 1, 2008.

Saxon, which bills itself as a tier one Texas-based Canadian independent oil and gas company, said it does not want to disclose the purchase price of the gathering systems at this time because CKGG is negotiating additional acquisitions.

“These newly acquired gathering systems more than double the miles of pipe CKGG owns in central Kansas,” said CKGG President Steven D. Moore. “Unlike the first system we acquired, which was shut in when we took it over in June 2007, these new systems are operational, generating cash flow right now. As we announced earlier this month, CKGG is reactivating its first system and will begin gathering gas under a new gas purchase contract within the next 30 days” (see Daily GPI, June 5).

The newly acquired systems are in Harvey, Kingman, McPherson, Pawnee and Reno counties. The largest system is approximately 48 miles of pipe and includes compression facilities. The systems are located just to the east and west of Saxon’s existing 100-mile gathering system, which stretches across McPherson, Rice and Barton counties.

“Saxon’s strategy to combine upstream E&P operations with the acquisition and operations of gas gathering and processing systems will maximize the profitability of both market segments,” said Saxon CEO Richard R. Green. “With gas prices where they are today, the opportunities for Saxon and CKGG look even more attractive than they did a year ago when CKGG made its first acquisition.”

Saxon currently has production totaling more than 245 boe/d from wells 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, Italy.

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