Canada-based company Desert Mountain Energy (DME) has signed a binding letter of intent with an undisclosed privately held company to acquire the Pecos Slope West Abo Gas Field and gas gathering system in Chaves County, New Mexico in US.

Upon completion of the transaction, which is scheduled on 30 June 2023, DME will immediately assume operations and revenue from the existing 188 gas wells and one water disposal well.

DME said that the majority of the wells in the Pecos Slope West Abo Gas Field are more than 25 years old and that most of these wells have not received any swabbing or cleanup in 20 years.

“Currently, there are no compression, helium processing or NGL stripping facilities located on-site nor are any of the wells on any type of artificial lift,” the company said in a statement.

The Canadian company is planning to revitalise the gas field and improve its natural gas sales from the current level of the wells.

DME said it will install a plant at the field to separate helium and strip valuable condensate liquids. It also plans to take over the field’s gas purchasing contract, which is due to expire in April 2024.

“This acquisition follows in line with the Company's previously disclosed plans and use of proceeds to utilise our mobile modular and scalable helium processing plant design, where applicable, elsewhere in the United States to maximise shareholder value,” the company stated.

DME, together with other companies, plans to capture and process all exhaust from the Pecos Slope West Abo Gas Field and gas gathering system to make it a net zero-carbon operation.