AXP Energy Limited ($AXP)

Hello, and welcome to Virtual Investor Conferences. On behalf of OTC Markets, we're very pleased you joined us for the oil and gas conference. The next presentation of the day is from AXP Energy. [Operator Instructions] At this point, I'm very pleased to welcome Dan Lanskey, Chief Executive Officer; and Managing Director of AXP Energy, which trades on the OTC ID market under the symbol AUNXF and on the ASX under the Civil AXP. Welcome back, Dan.

Yes. Thanks, Greg. Good to be here again and [ are ] pretty exciting times for a little old AXP, so I look forward to getting through the story, and thanks everyone for joining us. Just as Greg said, AXP Energy is based out of Australia, but operates in the U.S.A. We trade on the OTC and also our main board is the ASX in Australia under the code AXP. So as usual, normal disclaimer [ A ] bit of a background on the company. The company is listed, as we said, under the code [ AUNXFF ] on the OTC. The market cap is very small at the moment, about $5.4 million. We've got 450 million shares outstanding in Australia and that $5.4 million market cap [ in ] Australia. So we're really a sub-$4 million U.S. company. On the left is the board, you'll see that our Chairman there, Sam Jarvis has been with the company for a while and is one of the major shareholders. He's a petroleum engineer by background. We've also got Stuart Middleton, who's with us. He's another engineer. He's got a master's degree in finance as well and has been involved globally in the oil and gas business. So we've got some very talented technical people there. James is a nonexecutive director. He's also a substantial shareholder in the company and has a background in real estate investing and sales in Australia and very successful in that business and joins us as a Nonexecutive Director. So a small company. We're working on various places in Oklahoma and Colorado, and that's what I'll talk about over the next 20,[ 30 ] minutes or so. So a bit of background on the company. In the last -- in calendar 2025, we were operating in Colorado where we had assets and we were deployed some crypto mining equipment on-site using gas from the oil wells to power generators, and we deployed and successfully demonstrated a model where even on a small scale with bitcoin was above $100,000 a bitcoin, we were getting very good economic return on using gas to power and that enabled us to enhance our oil production up in Colorado. We initially went to expand our footprint in Colorado and do additional drilling only to be told by the state that it could take up to 12 to 18 months before we would get approval. So what we looked at was where can we go to scale this opportunity relatively quickly in a different -- sorry, regulatory environment, so my background has been over 20 years in Oklahoma drilling, completing operating oil fields as a senior executive and private investor, as well as running public companies that were doing the same. So in late last year, we moved across into Oklahoma, and we took up a small lease position inside of producing oilfield looking at duplicating previous success that we've had here to not only produce oil but also work with our industry partners a bit [ food ] to determine whether we could run the gas to power operations in addition to our oil production in Oklahoma just as we had done the pilot plant in Colorado. So what we're doing in Oklahoma, we've only taken, [ on ] the leases in December quarter. We drilled our pilot well as a development. Well, even though it's [ on ] -- it's our first well on the lease, it's offsetting existing production across a well-known region in the Mississippi Lime formation up on the Nemaha Ridge near Ponca City, Oklahoma. So previously, we drilled over 80 wells in this area. We've built an oil company that was a small one, 2,000-plus barrels a day. However, when you get an oil price above $70, those little companies make between [ $25 ] million and $30 million a year in revenue and so we're a small junior and we're looking to duplicate that kind of production. At the moment, we're just drilled and completed our first well, and we are selling gas down a sales line versus Colorado, we were using gas to generate Bitcoin. And I'll talk further about the bitcoin [ calling ] piece as we get through more information here. As I said, we drilled over 80-plus vertical wells in this area over the last 10 years in separate companies. And so our contractor team is very well developed skills on completing these low-cost, low-risk vertical wells. As you can see, we drill and complete a new well for about $550,000. Because the vertical wells, we go through a multiple of stacked pay zones that are behind the pipe for future development. There's wells in this area that were first drilled in the '80s that are still producing from the original Mississippi Lime zone and some have been completed in shallower Pennsylvanian zones for low-cost [ recompletions ] and so the payback on those is quite quick as well. Previously, while I was running a company called AusTex Oil Limited, which also traded on the [ ATC ]. We started out with a small field. We drilled 70-plus wells and grew that to over $30 million in revenue in just over 3 years. And that company grew to $187 million when I left in 2015, and [ we ] reserve position across the area we had, we had about 12,500 acres, and we're drilling vertical wells on that property at 40-acre spacing. So we took it from a startup business concept to a full operational listed vehicle, and we had a private equity group out of California come in and take that company over in 2015. What I like about Oklahoma is it's a low cost, low risk. And when you get it right, the paybacks are really quick in a current oil price we see at the moment, above $70, where that will be in the next 2 years, who knows, but we'll enjoy what we're seeing at the moment with an oil price in the area above $90. So these numbers, our internal rate of return is quite good because the payback is in less than 12 months, even at low production rates that these wells produce. So where are we? We're on the border of a field to the north here. You can see on the slide, there's a whole bunch of development on the north side of the river. And we've leased south side of the river, small parcel. It's -- we've only got 1,000 acres on this small parcel but at 40-acre spacing, we drill more than 20 production wells. So it's only a small-scale operation, but it is expandable as there is additional acreage to the south and west and east of [ us ] available. And at the moment, leasing costs are very they're not competitive -- sorry, they're very cheap because there's not a lot of action happening in the mid-continent that I'm sure will change over the next 6 months. To the north of [ us ], there's a -- this is where we were drilling wells under the [ Offset ] banner. And you can see that we had some pretty good results for a vertical well costing less than $600,000 with initial production rates of somewhere between 80 and 150 barrels plus a day on vertical wells. So when you have an oil price above $70, the payback on these wells is less than 12 months once they stabilize into production, even though there's a pretty aggressive decline curve, so over the first 12 months, the money is back in the bank. And what you find is, by the time you drill three or four of these wells, you're cash flowing the next development wells from production revenue received for oil and [ gas ] so you can see on the top right-hand corner of that slide, you've got the [ Phillips ] 66 oil refinery. So we're about 10 miles from -- as the crow flies from the [ Phillips ] 66 refinery in Ponca City, Oklahoma. So we have a development runway. We've only drilled our initial well in the December quarter, and it's now on production, and I'll talk more to that in a minute. But this is the area we're in. It's a highly known prolific oil region. This is not wildcatting. It's a development play. And the driver to the development is the commodity price as the price went under $60, everybody down tools in 2016, '17 took their rigs to the house. And now what we're seeing is we get back above $70, even in the last 6 to 8 weeks, we're seeing drilling rigs starting to roll out of the sheds again and get back into the oilfield. Not very quickly at the moment because investment is lagging and it's just starting to kick in. So we see this as a really good opportunity to duplicate what we've done before and expand [ it ] rapidly over the next 6 to 12 months. The key to this for a small company like us is access to capital. And that's why we're talking with everybody today, and it's good to be on this platform again to tell our story. So our inwards lease here, like I said, it's something small. It's 1,000 acres. There's 40-acre spacing leaves us with 20-plus development [ wells ] off the acreage offsetting existing product. So we have an [ $0.815 ] net revenue interest position, and we own the lease 100% outright. So what does that mean? It means that we pay all of the costs, share the wealthy with the mineral ride owner and we get to keep 81.25% of our net revenue in our bank account. So even at 30 to 40 barrels a day out of a small vertical well that costs less than $600,000, we get our money back in less than 12 months. It's low risk and the paybacks and the internal rate of returns are pretty robust once we get above $70 [ a ] hare. So one of the things when we first went in here is we drilled our first well was the [ Charlie #1 ] was a test well. We completed in quarter 4 2025. When we logged the [ interval ] down in the Mississippi line, which I have on the screen, on the right here is indicative of the mud [ log ] of what we saw. This is indicative of oil presence up here in this interval over here. And we saw that over 200 feet of the Mississippi Lime was indicating commercial hydrocarbons were present. With this well, we complete in the bottom of here down where the red squares are showing perforations across the limited interval in the lower section of the Mississippi line behind the pipe is what they call the chat or chart to the highest section here, which indicates a high porosity. We're down here where we started at the bottom. We'll produce out of this interval for a while. And once that declines, we'll come back and add this as well. So that's the options of the vertical well, low risk, low-cost and you get behind the pipe completions later. So one of the things we laid out of this business is that this is a fluid moving business. Initial production cuts can be anything from 100 to 200 barrels a day of oil and 120 [ Mcf ] of gas. But to get to that, it's a war drive reservoir, so you need to move liquid. So as you can see, we're moving 800 barrels of oil fluid out of the Charlie [ #1 ] well today. And [ the ] last -- since we put it back on after upgrading the saltwater disposal facility, the well is making around 30 barrels of oil and about 80 [ Mcf ] of gas. So this doesn't sound very exciting, but what it delivers is an internal rate of return above 50% in a payback period less than 12 months at current oil prices. So again, we've had wells that have come on better 100 barrels a day plus and this well is still coloring up. In other words, the oil cut is getting better every 24 hours as we just upsized our pump, and we now have a saltwater disposal facility in place. Our [ to ] total investment in this lease at the moment is less than $900,000 were drilled and [ fleet ] out that's U.S. dollars. We drilled and completed our first commercial oil well and we have installed and completed a [ salt ] order [ distal ] facility to handle the water for a number of wells. So this was our initial test well and we proved that the [ Heidrick ] carbon bearing reservoir at the Mississippi Lime is consistent with [ to ] the north of us, to the east of east and south of us. So as I said, this is now becoming a development play and access to capital will allow us to drill out this initial lease and look at additional leases all heading to our West and South. So we know this play on the Nemaha Ridge runs for about 50, 60-mile north, [ south ] and the 20-mile East West. Some of the major companies were in here in the [ 201 ]5 drilling horizontal wells at $3.2 million each and some of them were not even getting the initial production that we get out of our vertical wells. One of the things about a vertical well, we went in here, we put the rig on site in September. We had the facilities built for surface facilities in November. However, being in our initial well, we took a cautious approach over the first 60, 90 days, we had a smaller pump jack with a smaller pump to make sure that we're in the reservoir, and we're only moving between 200 and 300 barrels of fluid a day. And what we learned over the first 60 days was we were not getting ahead of the water the water level in the well was consistently high. So over the last 4 weeks, we've swapped out to a tubing pump. So we're now able to move 800 barrels of fluid a day and I'm pretty happy to report that that's now turned into 30 barrels of oil plus [ and ] gas over the last period of time in the last 5 days that we put it back on pump. So total investment in this well today is [ $700-odd ] plus our saltwater disposal facility. So even though [ is ] this first initial pilot program, we have demonstrated that the reservoir is commercial. It is laterally extensive under our acreage continues with offset wells to the north, south, east and west. And so what we're now able to do is put in place a development plan by accessing enough capital, whether that by equity or debt, to ramp up the next number of wells. It's been a bit of a slow time, but it's only 6 months since we took [ less ] than 6 months since we took on this project. And because of the market cap size, we've been [ able ] to had the work with a limited budget. We were initially planning to drill three wells. We've drilled one and we spent less than $1 million, including acquisition of the project. So the other thing is, I talked about up [ hole ] behind the pipe, we've still got another interval called the Mississippi chat. As you can see, we're seeing gas kicks on the right side of this graph here and the black indicators in the middle on the -- are showing [ hydrocarbon ] so one of the things that we can do is the decline kicks in on this first interval down lower, we're able to [ come ] further up hole perforate this interval and introduce additional flush production from this zone over time. Some of these wells will produce between 30 and 40 years in the area. They pay back in 12 months and the tail production is money for [ Jim ], if you look at it that way, as long as the oil price stays above $50, these wells make money. We're running gas engines of gas from the interval. We're seeing low operating costs of less than $5 a barrel, including pumping, so at $90 oil at 80% net revenue interest at $72 round figures, minus 6 [ leaves ] us about $65, $66 a barrel net back to the company to recover initial drilling costs of less than $650,000 all up. So payback in 12 months, internal rate of return is right up there and it's all now a matter of duplicating this getting the capital deployed and drilling more wells. We looked at offset wells to the north that we drilled previously that were better performing than this initial period with the Charlie #1. I drill the well in the call the [ cleats ] this well came in at over 180 barrels a day from a vertical well completion. When we put the slide side-by-side, they look very similar. The difference is, the one on the left was drilled about 10 years ago. The one on the right was billed last year. So what's happening is we get a little bit more aggressive on our next well, we'll go straight into looking to move 800 barrels of fluid [ a ] day looking for a better oil cut. The well on the left, came in at over 100 barrels a day [ IP ] and it has [ cumed ] in the last 10 years over 35,000 barrels of oil. So we know the oil is there. We know how to get it out of the ground. And with the right small amount of capital we can deploy this quickly. Our next plan coming up over the next few months is we're looking to drill another two production wells on the lease. We've already recompleted a legacy well for saltwater disposal. We'll need to [ do ] small upgrades on that to accommodate the next two wells that we are looking to do. And so we're only looking to deploy less than USD 10 million at the moment. We can scale that quicker if we have access to capital. However, the market cover of the company at less than USD 4 million, we restricted to the amount of initial equity capital we can raise and then the alternate now is that we can start to look at some other structured loan products now that we have cash flow from this lease and look to build a meaningful small oilfield here over the next 2 years. So when you look at who we are, what we're doing, what we're doing is repeatable development model. It's not exciting. It doesn't set the world on fire, but it generates internal rates and returns that are very compelling at above $70 oil up to 100,000 barrels of oil equivalent estimated ultimate recovery per well. It's low cost, low risk, low operating, it's scalable. Regulatory environment is encouraging development and drilling. The local contractor network is very solid. I've been working with them now as I keep getting reminded, I had hair when I first come here in 20 years later, I don't have it. So again, this is a small scale. We're restricted by the size of the company and we're working to grow the market cap so we can continue to roll out this development plan across known acreage here on the Nemaha Ridge in the middle of Oklahoma. So we've got a good team behind us. Even though it's a small team, we drilled our first well in the December quarter. We drilled, completed and have it on pump within 90 days at less than $700,000 for the first well, initial well. We then went and completed our saltwater disposal facilities, which will now handle five or six new additional wells, including the Charlie, which keeps our operating expenses [ very ] -- so that's the story of AXP Energy. We are still operating up in Colorado. We have working with our partners at Big [ Fufu ] and looking at the big corn optionality later. Currently at $90 oil and $3 as an Mcf, we're selling gas down the pipeline at the moment between 80 and 90 Mcf a day as well as our oil production. So in the short term, this -- we won't be looking at bitcoin on the site. If bitcoin suddenly jumps above $100,000 per coin. We have proven model we can deploy rapidly small modular on-site data mining using Starlink to connect to the Internet, and we've demonstrated that can work in the oilfield, but the economics at the moment are stick to the oil business and that's what we're doing. So what I can do is I'm watching the time of losing my voice. I've got about 5 or 6 minutes we can answer some of your questions that have come up here. So thank you again for the questions. I'm available to answer anything further. [ contact ] details. For those that are listening in the U.S., my direct number here on sell is [ 80 63 7050. 58063-705 ]0, my e-mail address is there on the screen. Happy to answer any questions and do welcome them because people have questions, they don't understand what we're doing and happy to help out.

I'll go back through some of these questions. One of them was about proven gas to power concept at the part find in Colorado with our partnership with [ Biff ], how do you see that model transferring to Oklahoma and bring more wells on? I quickly addressed that before. It's all a battle of economics at $70,000 a bitcoin and the current ability in Oklahoma, [ there's ] a gas straight down the pipeline, enjoy the $90 oil market we find ourselves in. That will be our focus in the short term. It's about $1.5 million to deploy a modular unit here that would make 1 bit point a month. That's CapEx with $1.5 million in total. And currently, I can drill 2 wells in the ground and put additional oil in the tanks for that same $1.5 million. converting your historic Stax reserve and type curve earnings to formal reserves and resources profile in AP, very good point. So we've drilled our first well. It's now producing. So what happens now is we will now be able to claim in our next reserve report. We would look to see proven developed producing reserves on that one well. Historically to the north in the next square mile, we were given 65,000 barrels of oil equivalent per location. We've only got 20 locations on this small lease that we're piloting, but we are looking at additional acreage offsetting this. So in 1 square mile, it can drill 16 wells at 40-acre spacing, and you have 65,000 BOE per location. It works out roughly around 1 million barrels of oil equivalent per 640 acres. That potential reserves. At the moment, there'll be probable reserves and this first well will give us a first proven developed reserve. [ Versus ] value outlined how do you think about the [ rerating ] catalysts over the next 6 to 12 months? Yes. Look, we are a small company, and it's quite interesting that with the change in the market in the last 42 days is incredible, inbound tone calls about local operators that we know that are looking to [ maybe ] look at some partnership. They're offering [ Sacred ] they're looking to do some joint ventures. They're looking to do some farm-ins. So watch this space. We don't have to do it alone. It's best if we can. As soon as we get 4 or 5 wells in have a decent revenue profile and a proven track record again, we can go back to a reserve-based lending, which is LIBOR plus a few peso when you start leveraging that sort of numbers on these small companies, our internal rate of returns go through 100% and because of the access to the debt facility rather than using additional cattle. Next question was -- okay. So there's a question here about what are we doing about marketing the company. And I appreciate we've been in limbo as we bedded down our first well, our pilot well here as well as our saltwater disposal oil. Initially, we were trading very cautiously. We were restricted with capital. We had to take our time, not. And now we've managed to put the well back in. We're hoping to get better than our 30 barrels a day and 120 Mcf and once we go and drill our second well, there will be a lot more things to report and timely release of updates. So over the last 6 months, it's been treading softly carefully, watching the pennies and now that we're getting some commercial numbers, we look forward to getting ahead. Okay. I got a few minutes still. With all the moving parts, Colorado, Oklahoma and [ gas ] to power, what does success in '26 look like to you in terms of production, megawatts online and cash flow. And again, it comes back to capital. If I can drill six more wells by the end of December quarter this year, we should be looking at a few hundred barrels a day in the tank plus Mcf. Currently, while the bitcoin price remains under $80,000 or thereabouts. The return on the capital is [ deployed ] into drilling new wells rather than rolling out megawatts and hash rate. So we'll watch it closely. Again, it's modular. So if there's a turn where we see bitcoin go above [ 90 ] and hold $100,000, we look at the economics and we'll watch the oil price as well, which is driving what's happening at the moment. Another quick one was your recent work at Charlie #1 is change of confidence level in rolling out the full 30 well development plan in Oklahoma. The answer to that is 100%. It really has -- when we first started, we were very conservative. We were not pumping enough fluid. We couldn't move enough disposal of enough water. We've remedied that situation. We're moving them out of fluid we need. The oil cut is coming up and what we're seeing is we're now duplicating some of the numbers from north of the river in a new area. So this is now going to become a development program. Just to give you some indication, even at 30 barrels a day, if that's all we get and it doesn't get any better, at the current oil price, we still got an internal rate of return of 57% and pays back in less than 11 months. If we can move that and get a better case result on our second well, just to 65 barrels of oil a day, not getting anything close [ to ] -- our internal rate of return goes above 100%, paybacks in 150 or 5 to 6 months, 150-day payback, and that's working on oil price at $90 based on operating expenses of $10 a barrel and a 60% decline in the 12 months. These are low cost, low risk repeatable, they are boring, but they bring cash flow. And that's what we're looking to drive here in the next 12 months. So my time is up. I'll leave it there. I'll answer any questions you want to send through on the e-mail, and I'll be available on the cell phone number I gave you should anybody want to call me direct. Thank you very much for listening in. Thanks, Greg and the team at OTC Markets. I look forward to coming back soon and giving you an update.