A pumpjack on the plains of southeastern New Mexico in the US. Credit: J. N. Stuart.

Hillcrest Petroleum has signed a memorandum of understanding (MOU) with Australian oil and gas firm Xstate Resources to jointly pursue onshore oil and gas acquisitions in Canada and the US.

Hillcrest has identified certain producing oil and gas assets in the Western Canada Sedimentary Basins and is currently reviewing them for potential acquisition and development.

Xstate is also reviewing several oil and gas projects in the US to pursue acquisition opportunities.

The strategic alliance will allow the companies to offer participation in North American acquisition opportunities to each other.

If one of the firms chooses to pursue one or more of the acquisition opportunities, it will facilitate the transaction on behalf of the companies.

“Hillcrest and Xstate are aligned in their strategic objectives for creating shareholder value.”

According to the arrangement, the originating company may operate the acquired assets under joint venture agreements and implement field development plans. Once the assets are bought, Xstate and Hillcrest will jointly fund the developments.

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Hillcrest Petroleum CEO Don Currie said: “Hillcrest and Xstate are aligned in their strategic objectives for creating shareholder value. Both companies are focused on acquiring, developing and delivering the value potential from conventional oil and gas assets with material upside.

“Aligning the companies makes the collective capital, management and operational efforts much more efficient and opens the opportunity for Hillcrest to build effective and efficient core company operating capability based on larger operations that are currently available to Hillcrest.”

The partnership is set to serve as the primary investment vehicle for material investments by either party in the North American oil and gas sector. Hillcrest will support future investment by Xstate in onshore projects and vice versa.

Xstate Resources CEO Cosimo Damiano said: “The joint venture will benefit from each partners management teams past activities in North America; scaled balance sheet capacity to access larger field acquisitions, providing economies of scale in operating costs and production operations.”