In connection with the property acquisition, Blizzard entered into a farm-in agreement with the Vendor in respect of properties in the North Eastern area of British Columbia. Under the terms of the farm-in agreement, Blizzard has committed to invest a minimum of $16.0 million on exploration and development activities by April 30, 2005. Blizzard will have access to 168,000 acres of option land and will pay 80% of exploration expenditures to earn a 50% working interest from the Vendor. Blizzard will have the option to commit on or before August 31, 2005, up to an additional $20 million in earning drilling expenditures on or before April 30, 2006 on the farm-in lands.
Concurrent with the transaction, Blizzard has entered into a new credit facility with its banker, which provides for borrowing capacity up to $60 million.
Finally, Blizzard has renegotiated the joint venture relationship it announced in an earlier press release dated August 20, 2004. Blizzard has released the exploration company from this obligation and has instead, sold the working interest in the mineral rights that this company would have earned through the participation and farm-out agreement for $3.5 million.
Blizzard's common shares are listed on the Toronto Stock Exchange under the symbol BZZ. Blizzard is an Alberta-based energy company engaged in the exploration for, development and production of crude oil and natural gas in the Western Sedimentary Basin.
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