Xstate Increases its Stake in the Borba AMI in Northern California
ASX-listed Xstate Resources Ltd. has entered into an agreement with Sacgasco Ltd. to acquire an additional 9.33% interest in the an Area of Mutual Interest (AMI) containing the Borba prospect located in the Sacramento basin in northern California, in exchange for funding certain work commitments.
Under the terms of the agreement, Xstate will increase its interest in the Borba AMI to 33.33%, in exchange for funding 37.5% of the total imminent Borba 1-7 well costs. The final drilling permits have already been received from the Californian regulators for the drilling of the well, which is scheduled to spud in February 2021. Upon completion, Sacgasco will hold a reduced 66.67% operated interest in the AMI.
The Borba AMI is situated approximately 5 mi. southeast of Sacgasco’s Dempsey Project. The asset primarily targets the Kione formation and includes the Borba prospect, a large 4-way dip closure mapped on 3D seismic with multiple targets and multi-Tcf potential. The prospect is interpreted as the optimal location to test multiple stacked amplitude anomalies and potential channel fill conventional sand reservoirs in a vertical well. The Sacgasco JV infrastructure is available nearby to enable a quick start to sales of discovered natural gas at the Borba prospect.
“The ability to increase the Company’s interest in the well to 33.33% has been recognized as a strategic step for the Company immediately prior to drilling of the well,” said David McArthur, Managing Director of Xstate.
Headquartered in Fremantle, Western Australia, Xstate is focused on onshore exploration and development activities in the U.S. and Canada.
Subiaco, Western Australia-based Sacgasco is also engaged in operations in the U.S. and Canada, and holds interests in partnership with Xstate in the Dempsey and Alvares prospects in California, and oil-producing assets in the Red Earth area of Alberta.