This Saskatchewan Petroleum and Natural Gas Special Exploration Permit comprises 235,830 acres or 368 contiguous sections of land. Storm Cat has farmed into Golden Eagle's 50% working interest, which provides Storm Cat with a 45% working interest before payout and 30% working interest after payout.
Storm Cat will pay Golden Eagle, the 'Farmor', $750,000 CDN and agrees to pay 95% of the first two years work commitment of $500,000 CDN. Furthermore, Storm Cat has agreed to pay 95% of the approximate $100,000 of technical and geological expenses incurred as programs are completed.
Payout provisions provide for Storm Cat, the 'Farmee', to recover 2.5 bcfe attributed to its 45% working interest share of petroleum substances produced from the Exploration Permit. Restated, Storm Cat will receive 45% of the first 5.5 bcfe of production from the exploration permit area. At Payout, Storm Cat will convert to a 30% working interest in these lands.
Company President, Scott Zimmerman said: "This transaction is consistent with our focused business plan of applying our technical expertise in the development of unconventional natural gas resources. Our partnership with Golden Eagle provides a combination of their geological expertise in this play type and area, along with Storm Cat's drilling and completion expertise to develop the potential resource. As a result of the Moose Mountain acquisition and continued negotiations for additional Western Canadian properties, Storm Cat is expanding into larger offices in Calgary, Alberta. The company has recently signed a five year lease on approximately 5,400 square feet located at 209 - 8th Avenue SW, Calgary, Alberta. The new offices are expected to be fully operational by March 31, 2005."
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