QS Energy, Inc. a developer of integrated technology solutions for the energy industry, today announced that it has signed a joint venture agreement with JBL Royalty Company, LLC, a wholly owned subsidiary of JBL Energy Partners, an oil and gas exploration and production company, to assist in identifying and assessing undervalued oil and gas leases, properties and other assets. As a JV partner to QS Energy Pool ("QSEP"), the Company's wholly owned subsidiary established for pursuing acquisition opportunities, JBL Royalty Company will source and evaluate proved developed producing (PDP) oil & gas properties, with upside cash-producing potential through the drill bit.
"Coming on the heels of our announcement that a recently re-engineered and upgraded AOT unit will be re-deployed on a major condensate line in south Texas, our partnership with JBL Royalty Company further underlines our commitment to executing purposefully and aggressively on our previously stated dual-pronged growth strategy," stated Greggory M. Bigger, QS Energy Chief Executive Officer and Chairman. "Our goal and objective over a rolling 12-month period is to identify acquisition opportunities that yield the Company nearly $4,000,000 in net operating cash flow on a per annum basis. With access to favorable equity and secured debt financing, we can position these projects for long term growth within the oil and gas vertical."
Headquartered in Texas, JBL Royalty Company is a wholly owned subsidiary of JBL Energy Partners, an independent E&P firm experienced in managing the well operations and output of early stage and mature properties in the East Texas basin and the Gulf Coast. Following the industry's first use of enhanced oil recovery techniques nearly a decade ago to extract tight oil and gas from shale formations, JBL Royalty Company has purchased, leased or joint ventured a variety of acreage positions in several high oil and gas production regions of Texas.
"Since announcing the formation of QS Energy Pool in July of last year, we have seen a continued growth in the volume of undervalued oil and gas assets entering the market due to the current level of spot prices," Mr. Bigger added. "Jason Lane and his team at JBL have earned a well-deserved reputation for locating and acquiring exceptional oil, gas and mineral rights opportunities, and in doing so they have demonstrated an impressive degree of operational expertise and for following through with high-return results for their partners. We look forward to a mutually beneficial relationship with JBL in capitalizing on the market conditions that are providing today's buy-side opportunities."
"With regard to our acquisition strategy, we're going to be paying close attention to PV10 valuation, carefully scrutinizing terminal value, while being highly mindful of the depletion curve on the assets that we acquire," Mr. Bigger stressed. "We will only consider deals that represent exceptional value to our shareholders and the strongest potential for generating cash flow on an accretive basis for QS Energy. While JBL will stay focused on much larger transactions, there will be also significant opportunities for QSEP to analyze non-operated producing assets while securing mineral and royalty rights."
Source: QS Energy, Inc.
Date: Mar 8, 2016