CaiTerra International Energy Corporation announced that drilling has begun on its property in the Faust area of north central Alberta. The Faust Property is located just north of the prolific Swan Hills oil field and west of Black Pearl Resources Inc.'s Mooney Pool producing oil property and south of the Town of Slave Lake. The lands forming the Faust Property are Crown leases with varying expiry dates. The Faust Property comprises approximately 18,600 net acres (approximately 30 sections) of lands of interest that are not subject to expiry for the next 3 years and a further 3,840 net acres (6 contiguous sections) of lands of special interest that have been continued through to the end of April 2013.
The drilling currently being undertaken is not only to maintain the 6 sections of land of special interest in good standing, but also to test for the presence of the "Bluesky Sand sweet oil zone" which has been identified as an economic oil producing zone in the Mooney producing oil property located to the east of the Faust Property.
The well configuration is a vertical well with a planned drill depth of 3,133 feet (955 meters) and is being conducted along a line of 2D seismic located on the eastern half of Legal Subdivision (LSD) 9, Section 4, Township 72, Range 10, West of the 5th Meridian. At the date of this news release, the drill has reached a depth of 1,640 feet (500 meters).
The Faust Property was acquired by CaiTerra on Dec.14, 2012 for a total cash payment of $2,500,000. On Feb. 4, CaiTerra sold a 25 percent interest in the Faust Property to Western Lion Resources Ltd. for a cash payment of $1,000,000. At the time of spudding the drill, Western Lion had not exercised its option to buy an additional 25 percent interest in the Faust Property and, as a result, Western Lion maintains a 25 percent interest and CaiTerra maintains a 75 percent interest in the Faust Property. Western Lion has provided CaiTerra with its 25 percent share of the costs for drilling the well.
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