TAMM provided an update to the Manning Heavy Oil Project.
TAMM has reached agreements with a private UK Corporation with Major Oilsands Lease holdings in the prospect area and Cougar Oil and Gas Canada. The private corporation holds 61 sections of oil sands lease adjacent to the TAMM lease holdings. TAMM and Cougar have terminated their previously announced farmin to negotiate a new agreement with the private Corporation. The private corporation has signed a multi-phase farm-in agreement with TAMM to define and develop TAMM's 47 section Manning area heavy oil prospect in parallel with the development of the private corporations 61 sections of land in the Manning area.
Cougar will become the "Operator" of the project, be compensated on commercial terms for the work done, and earn 5% working interest on the combined project lands of 108 sections from TAMM and the private corporation after one year.
Entering into the farm-in agreement with the private corporation allows TAMM to utilize the results to the maximum ability without having to raise capital through debt or equity at this time. In addition, with the development on the adjacent properties, and a common operator in Cougar, synergies are expected as well as benefits due to size, shared information, momentum, economies of scale as the projects move through the various stages to the expected developments.
The first phase of the farm-in consists of the private corporation performing a $2.5million work program to earn a 30% working interest in the TAMM heavy oil prospect. Subsequent year programs of $6.5 million dollars will earn an additional 20% working interest.
This work program will be done at no cost and no risk to TAMM and will dramatically increase the value of the Manning heavy oil project. The work program will focus on defining the Elkton and Debolt heavy oil prospects and will consist of the following operations;
Multi-well coring program: The target formations, Elkton and Debolt, have been mapped in the Manning area as a result of the numerous deeper conventional wells drilling through the heavy oil prospects. With some areas of the TAMM lands having over 30m of potential oil pay, the core data will provide the foundation of the future development research. The coring program will consist of three to five core holes being drilled to gather Elkton and Debolt samples. The targets for the cores will be designed from a seismic program review.
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