LongBow Energy and Mesa Resources have entered into an agreement with private, arms-length vendors to farmin to a two-section parcel in the Watts Lake area of eastern Alberta. The initial two well commitment will test the Dina sand. The Companies have an option to elect to drill a third well to earn an additional interest. If successful, several other drilling locations are available for testing on the earned lands. The Companies expect to spud the commitment wells before the end of January 2004.
The Companies have the right to earn a 75% interest subject to a 10% non-convertible royalty on 50% of the working interest in the farmout lands. In order to earn their interest, the Companies must fund 100% of the costs to drill and complete the three well program. The Companies will share the costs and earning equally.