By acquiring this additional segment, the company can now purchase third party gas from producers who have had their natural gas wells shut-in due to no available market for their gas.

This segment of pipeline had been laid years ago by a local small independent company who had plans to drill wells in this area and sell gas directly to end users in the town of Nowata, Oklahoma. After laying the pipeline and connecting a few of its wells, this independent company halted further development.

Since then, the pipeline has been used only to transport the independent company’s gas from a few marginally producing wells. Without sufficient capital to install the infrastructure needed to purchase third party gas, the small company looked to sell its pipeline and approached Cavu upon learning of its acquisition of the Hogshooter project, Cavu said.

Cavu has already begun planning its field development schedule to tie shut-in wells in the area into this segment of line, which feeds into the company’s main pipeline that was obtained in the Hogshooter project acquisition. There are approximately a dozen wells that could immediately be tied into this acquired line.

Additionally, there are producers currently selling to other gas purchasers that have expressed an interest in selling to Cavu instead at better terms. By purchasing the gas from these producers, the company will be able to charge transportation costs and generate cash flow.

William Robinson, president of Cavu, said: “One of the things we looked at when we were considering the acquisition of this project was how much natural gas we could purchase from producers who no longer have access to pipelines or who have been forced to shut-in their wells due to exorbitant transportation charges from purchasers in this area. Another appealing factor is that this segment opens up acreage that we can develop that has been largely ignored due to the lack of pipeline capacity.”

Cavu’s management team has set a target of purchasing gas from at least 30 wells in the area within the next 18 months.