Permex Signs $3MM Option Agreement to Acquire Producing Wells

Permex Petroleum Corporation said it has entered into an option agreement to purchase producing oil and natural gas wells from an ownership group that includes Navidad Petroleum and TMR Exploration.

The assets include over 50 producing wells, gathering facilities as well as over 20,000 net mineral acres of undeveloped leasehold interests, Permex said in a news release.

Under the terms of the agreement and in consideration of a $75,000 cash payment, Permex received a six-month option to acquire all of the group’s interest in certain producing oil and natural gas assets for total consideration of $3 million in a combination of cash and stock, including a minimum of $1.75 million in cash, according to the release.

If the group terminates the option, Permex will receive a refund of the US$75,000 option payment as well as the break-fee payment of $50,000 from the group, the Vancouver, British Columbia-based company said.

“We believe this Option gives Permex the ability to not only potentially expand its gas production and behind-pipe reserves but could also further Permex’s strategy of co-developing hydrocarbon and Bitcoin assets across producing oil and gas properties. The assets covered by this option currently produce [approximately 4 megawatts] of power and we believe that if we decide to exercise this option that the underlying assets will be turn-key prepared for the deployment of in-field Bitcoin mining operations”, Permex CEO Brad Taillon said.

“Since Permex’s existing asset base reserves are weighted heavily towards oil, in our opinion diversifying our asset base with the possible acquisition of an additional source of stable gas production with significant behind pipe gas reserves makes fiscal sense as such acquisition could give the Company the opportunity to develop significant reserves across both hydrocarbon categories,” Taillon added.

LOI Signed for Potential Bitcoin Mining Collaboration

Last month, Permex entered into a non-binding letter of intent (LOI) with Texas-based 360 Energy Inc. an oilfield services provider.

Under the LOI, Permex will work with 360 Energy to identify possible sites for the potential deployment of 360 Energy’s In-Field Computing (IFC) technology, an off-grid bitcoin mining operation powered solely by natural gas that requires no existing gas, electric, or network infrastructure, according to an earlier statement.

The IFC system is designed to convert produced natural gas directly into electricity to power 360 Energy’s on-site data centers, which Permex said it believes has the potential for it to realize higher returns from natural gas volumes that would otherwise be flared, stranded, or sold at likely lower prices.

“We believe that a potential partnership with 360 Energy would allow Permex to move beyond traditional monetization models and embrace transformative technology that could enhance both asset value by capturing higher realizations on natural gas, as well as environmental performance by lowering methane emissions,” Taillon said.

“We believe 360 Energy’s expertise in deploying scalable, pad-based computing systems could allow Permex to extract additional value from the Company’s current and future gas production while positioning Permex at the forefront of innovation in the energy sector,” Taillon continued.

“This potential collaboration reflects a broader strategy by Permex to integrate disruptive technologies into the Company’s core operations, and to rethink how oil and gas assets are valued, developed, and monetized in a rapidly changing energy landscape,” he concluded.

Permex said it intends to incorporate IFC technology into its asset evaluation process and capital allocation strategy moving forward and the parties are working towards entering into a binding definitive agreement.

Permex describes itself as a company with assets and operations across the Permian Basin with a strategic emphasis on assets for Bitcoin mining operations alongside hydrocarbon production.

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