Ptarmigan has completed an option agreement for its Western Newfoundland exploration license with Canadian Independent Oil and Gas Company (CIOGC), a privately held, Calgary based oil and gas exploration company.
President and CEO Craig Boland says that a discovery under this agreement will yield Ptarmigan a gross overriding royalty based upon a percentage of the gross production proceeds without deductions. "We are excited and very pleased that this agreement, coupled with the recent gas-in-shale farm out agreement with Shoal Point Energy (April 2011), has established strong partners to explore both traditional and non-traditional targets within Exploration License 1120, with very favorable terms for our shareholders."
Under the terms of the agreement CIOGC has 90 days to review existing seismic data and decide whether or not to exercise its option to acquire, a minimum of 1000 square kilometers of high definition 3D seismic data within the area of Exploration License 1120; 100% owned by Ptarmigan Energy. Exploration License 1120 is currently undergoing an environmental assessment and permitting process required by the Canada Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB).
Should CIOGC exercise its option to collect additional seismic data, it would be in a position to execute a definitive agreement with a seismic acquisition contractor by October, 2011 with a view to starting that work in September 2012 following completion of the environmental assessment process. CIOGC has until December 2013 to exercise its option to drill a test well to the depth of 3,250 meters or 50 meters into the top of the Labrador Formation; the established marker below all anticipated targets. That well must then be spudded by no later than December 2014.
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