Safe & Green Holdings Corp. Announces 51% Purchase of Winchester Oil and Gas by Wholly Owned Subsidiary Olenox Corp.

Rhea-AI Summary

Safe & Green Holdings (NASDAQ: SGBX) announces that its subsidiary Olenox Corp. has acquired a 51% stake in Winchester Oil and Gas, which operates over 500 wells in Texas. Winchester currently produces approximately 50 barrels per day, with historical peak production of 200 barrels over the last four years.

The acquisition includes a $250,000 bond enabling unlimited well licenses in Texas. Olenox plans to reactivate 30-40% of the wells by Q2 2025, utilizing its patented down hole cleaning and stimulation technologies along with combo service rigs to reduce equipment and fuel costs. The company's Machfu technology implementation aims to decrease downtime and operational costs through integrated bidirectional well monitoring systems.

Positive

• Acquired 51% controlling stake in Winchester Oil and Gas with 500+ existing wells
• Includes $250,000 bond for unlimited well licenses in Texas
• Technology implementation expected to reduce operational and lifting costs
• Near-term production increase expected through 30-40% well reactivation by Q2 2025

Negative

• Current production of 50 barrels/day represents 75% decline from peak production of 200 barrels
• Majority of acquired wells are underperforming and require reactivation

Insights

Financial Analyst

Safe & Green Holdings' acquisition of a 51% stake in Winchester Oil and Gas represents a significant strategic pivot. While primarily known for modular structures, SGBX is now extending into energy production with a ready-made portfolio of over 500 wells in Texas.

The current production of 50 barrels daily (with historical peaks of 200 barrels) provides immediate revenue generation capabilities. More importantly, the acquisition includes a $250,000 bond allowing unlimited well licenses in Texas, creating substantial expansion optionality while enabling rehabilitation of underperforming assets.

The company's reactivation timeline, targeting 30-40% completion by Q2 2025, suggests a methodical approach to integrating these assets. Most compelling is the technology integration strategy using proprietary down-hole cleaning and stimulation technologies to reduce servicing costs, alongside Machfu's bidirectional monitoring systems to minimize downtime and operational expenses.

This cost-efficiency focus is particularly relevant given oil price volatility - management specifically notes these technologies could maintain profitability "even at historically low pricing per barrel." This acquisition fundamentally transforms SGBX's business model and revenue streams, diversifying beyond construction into energy production with technological differentiators aimed at operational efficiency.

Energy Industry Specialist

This acquisition provides SGBX instant entry into oil production through a substantial portfolio of 500+ wells across Milam and Parker counties in Texas. The current production level of 50 barrels daily represents modest initial output, but Winchester's demonstrated capacity to produce up to 200 barrels daily in recent years indicates significant upside potential through proper well management.

The $250,000 bond securing unlimited well licenses in Texas is particularly valuable as it eliminates regulatory hurdles for expansion while facilitating the rehabilitation of underperforming wells. Olenox's approach centers on technological advantage - their patented down-hole cleaning and stimulation technologies could significantly reduce per-well servicing costs if implemented effectively.

The Machfu monitoring integration represents an important operational efficiency play, potentially reducing the three major operational cost centers in well management: downtime, operator costs, and energy consumption. By addressing these simultaneously through bidirectional monitoring, Olenox could meaningfully reduce lifting costs per barrel - the critical metric determining profitability in marginal well operations.

The projected 30-40% well reactivation by Q2 2025 suggests a cautious but progressive integration strategy. This acquisition fundamentally transitions SGBX from a pure-play modular construction company to a diversified entity with energy production capabilities.

MIAMI, April 08, 2025 (GLOBE NEWSWIRE) -- Safe & Green Holdings Corp. (NASDAQ: SGBX) ("Safe & Green Holdings" or the "Company"), a leading developer, designer, and fabricator of modular structures, announces its wholly owned subsidiary, Olenox Corp. (“Olenox”), has purchased a 51% stake in Winchester Oil and Gas, LLC (“Winchester”).

Winchester operates more than 500 wells in Texas with leases centered in Milam and Parker counties. It recently reported production of approximately 50 barrels a day, with peak production reaching 200 barrels in the last four years. It also holds a $250,000 bond, which allows Olenox unlimited well licenses in Texas, which is ideal for expansion while also utilizes cleanup of underperforming properties. Through Olenox, the Company will operate the existing wells and perform reactivation, for which it expects 30-40% to be complete and creating production in the second quarter of 2025.

Michael McLaren, Safe & Green Holdings CEO commented, “The Winchester acquisition is a prime example of the capability of our subsidiary Olenox to create turnaround utilizing its patented down hole cleaning and stimulation technologies combined with state-of-the-art combo service rigs that reduce the amount of equipment and fuel, resulting in lower servicing costs per well. We believe this investment is an important addition to our holdings and look forward to providing production updates as they develop.

“Further, our Machfu technology allows us to reduce downtime, operator and energy costs with its integrated bidirectional well monitoring systems. Reduced costs mean reduced lifting costs per barrel and in volatile markets allows Olenox to remain profitable even at historically low pricing per barrel,” Mr. McLaren concluded.

About Olenox Corp.

Olenox Corp. is an advanced energy company focused on oil and gas production, energy services, and energy technologies. Olenox specializes in acquiring and revitalizing distressed energy assets, leveraging proprietary technologies to enhance production while minimizing environmental impact.

About Safe & Green Holdings Corp.

Safe & Green Holdings Corp., a leading modular solutions company, operates under core capabilities which include the development, design, and fabrication of modular structures, meeting the demand for safe and green solutions across various industries. The firm supports third-party and in-house developers, architects, builders, and owners in achieving faster execution, greener construction, and buildings of higher value. For more information, visit https://www.safeandgreenholdings.com/ and follow us at @SGHcorp on Twitter.

Safe Harbor Statement

Certain statements in this press release constitute "forward-looking statements" within the meaning of the federal securities laws. Words such as "may," "might," "will," "should," "believe," "expect," "anticipate," "estimate," "continue," "predict," "forecast," "project," "plan," "intend" or similar expressions, or statements regarding intent, belief, or current expectations, are forward-looking statements. These forward-looking statements are based upon current estimates and assumptions. These forward-looking statements are subject to various risks and uncertainties, many of which are difficult to predict that could cause actual results to differ materially from current expectations and assumptions from those set forth or implied by any forward-looking statements. Important factors that could cause actual results to differ materially from current expectations include, among others, the Company’s ability to successfully integrate Winchester into Olenox’s pipeline, the Company’s ability to successfully reactivate Winchester’s oil wells to increase production, the effect of government regulation, the Company’s ability to maintain compliance with the NASDAQ listing requirements, and the other factors discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 and its subsequent filings with the SEC, including subsequent periodic reports on Forms 10-Q and 8-K. The information in this release is provided only as of the date of this release, and we undertake no obligation to update any forward-looking statements contained in this release on account of new information, future events, or otherwise, except as required by law.

Investor Relations:
CORE IR
516 222 2560
investors@safeandgreenholdings.com

Source: Safe & Green Holdings Corp.

FAQ

What is the production capacity of Winchester Oil and Gas wells acquired by SGBX?

Winchester currently produces 50 barrels per day, with peak production of 200 barrels in the last four years across its 500+ wells in Texas.

How many wells will SGBX reactivate through Olenox in Q2 2025?

Olenox plans to reactivate 30-40% of the acquired Winchester wells by the second quarter of 2025.

What technology advantages does SGBX bring to the Winchester oil wells operation?

SGBX implements patented down hole cleaning technology, combo service rigs, and Machfu bidirectional monitoring systems to reduce equipment, fuel, and operational costs.

What is the value of the well license bond included in SGBX's Winchester acquisition?

The acquisition includes a $250,000 bond that allows unlimited well licenses in Texas for expansion purposes.