Blacksteel Energy Inc. announced that it has entered into a farm-in agreement with an industry partner to participate in the drilling of horizontal wells in the Cardium oil formation in the Buck Lake area of Alberta.
The Agreement provides for the earning of a 25-percent working interest in 1,280 acres of land by paying 37.5 percent of the cost to drill, complete and equip the first two wells. The first well will earn a 25 percent working interest in 320 acres of the land, and the second (Option Well) will earn the balance of the 1280 acres. All subsequent wells will be drilled with Blacksteel paying 25 percent of the costs for a 25-percent working interest in the land. Current well spacing provides for up to four wells per section in the Cardium zone in this field.
It is contemplated that subject to rig availability, surface access and regulatory approval, the first well will be drilled on or before Aug. 30. The Corporation intends to fund its share of expenditures for the test well from its private placement.
Blacksteel is very encouraged with the potential of this opportunity given the off-setting well results and the multiple drilling locations which would form a platform of growth to build value in the Corporation. This transaction represents the focus of Blacksteel on the acquisition of low risk, oil weighted opportunities having early payback of capital and long life reserves.
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