Under terms of the Agreement, Nordic will be granted access to 6,525 hectares of Cote First Nation land directly north of Kamsack and will receive an Oil and Gas Permit to undertake exploration activities on the property. The Permit is owned jointly by Nordic Oil and Gas Ltd. and Western Warner Oils Ltd.
The Agreement calls for Nordic to carry out seismic sometime this spring, before the frost is out of the ground, then drill a test well during the summer months. If oil and/or gas is discovered, Nordic will be entitled to convert the Permit into a Petroleum and Natural Gas Lease. In return for granting Nordic Oil and Gas access to this portion of its land, Cote First Nation will be paid a royalty as the mineral owners.
"We are proud and honoured to enter into this important agreement with the Cote First Nation, as we continue to look toward developing new and creative approaches to designing business agreements with First Nations people in Western Canada," stated Nordic's CEO Donald Benson. "We have found that First Nations leaders are very open to participating in the development of their oil and gas reserves, and we are very much looking forward to working with Chief Whitehawk and the Band Council on this exciting project.
"The Cote First Nation initiative will complement our Joffre, Alberta and Preeceville, Saskatchewan activities, and gives Nordic Oil and Gas three strong prospective areas in Western Canada," added Mr. Benson.
The Cote First Nation property is divided by the Assiniboine River, and is an area that has a strong history of successful exploration dating back to the 1930s and 1940s. During this period, Kamsack was home to an oil refinery, which was damaged by fire in the late 1930s, then destroyed altogether in 1944 when the town was hit by a devastating cyclone. The refinery was never re-built and according to Mr. Benson, "the area went off the radar screens of most oil and gas companies, until just recently."
Many oil and gas finds have occurred along the banks of rivers, "so we are very optimistic this particular area will be prove to be productive," he added.
The Town of Kamsack is located approximately 100 kilometers to the southeast of Preeceville, where Nordic Oil and Gas has an 80% interest in 137,780 acres of exploration permits. The Company is nearing completion of 37 kilometers of seismic on its Preeceville land, and the results will assist it in identifying where the next well will be drilled in the area later this year.
"It is our hope that we will be able to drill both the Preeceville well and the well on the Cote First Nations land at the same time," Mr. Benson stated.
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