Saxon Oil Forms New Operating Subsidiary

Dallas - Saxon Oil Company announced recently it has formed a new subsidiary, Central Kansas Gas Gathering Company, LLC ("CKGG") to pursue midstream energy-related activities in Kansas.

Due to a converge of several unique and timely factors, opportunities exist to exploit untapped oil and gas reserves in Kansas, particularly in areas where gas has been overlooked in favor of oil. Saxon's strategy is to combine its Saxon Oil Company's exploration and production operations with the acquisition and operations of selective gathering gas (pipeline) and processing systems through CKGG to maximize the profitability in both market segments. Saxon will receive revenue for its own production, as well as transportation, processing and other fees from third-party gas producers. An extra bonus is that the natural gas in the area has a helium content of 1% to 5% — and helium currently sells for $70 per thousand cubic feet.

Shallow drilling objectives, favorable lease terms, excellent per well average reserves, and proximity to infrastructure make Kansas an excellent growth area for Saxon. Further, CKGG will target gathering systems, pipelines, and gas processing facilities that can leverage Saxon's exposure to attractive energy-related opportunities in central Kansas.

Historically, Kansas ranks fifth among states in the United States in cumulative production with over 30 trillion cubic feet of gas and over 6.6 billion barrels of oil produced to date. In addition, central Kansas holds some of the largest reserves of helium in the world.

SOURCE: Saxon Oil Company Ltd: