Under terms of the Agreement, Nordic will be granted access to 27.5 sections (approximately 17,400 gross acres) of Beaver First Nation land directly east of High Level 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 Desoto Resources Limited.
The Agreement calls for Nordic to drill a minimum of two wells during the next 12 months, although the Company expects to drill a minimum of 25 wells on the property over the course of the next few years. It is expected that the drilling program will commence this Summer. In return for granting Nordic Oil and Gas access to this portion of its land, Beaver First Nation will be paid a royalty as the mineral owners.
"We are extremely pleased and excited at the prospects that lie ahead for this property," stated Donald Benson, Chairman & CEO. "This represents a major acquisition for Nordic Oil and Gas, one that we feel will have a far-reaching and positive impact on the Company for many years to come."
At present, two major energy companies are producing natural gas on lands near the Beaver First Nation property at a depth of 200 metres from the Blue Sky Formation. "This tells us that this area is more than just prospective," said Mr. Benson. "It gives us considerable optimism that the Beaver First Nation land will be highly productive.
"We are certainly looking forward to working with Chief Henry Francis and the Beaver First Nation Band Council on this exciting project and we are eager to get the first two exploration wells drilled as soon as possible this Summer to confirm our strong belief that this area is equally as productive as those neighbouring lands," Mr. Benson added.
Commenting on the agreement, Chief Francis stated: "We are happy to be working with Nordic Oil and Gas on this exciting initiative. They are experienced in working with First Nations People and we look forward to collaborating with them over the coming months."
The acquisition of the Beaver First Nation property gives Nordic Oil and Gas a total of approximately 175,000 gross acres of prospective land in four highly prospective areas of Alberta and Saskatchewan.
Nordic Oil and Gas is currently undertaking a $5.6 million financing by way of a Private Placement Offering of Flow-Through Common Shares and a Public Offering of Class A Common Share Units. A portion of the money raised through these Offerings will be used to finance the drilling of the new exploration wells on the Beaver First Nation land, along with other key production and exploration initiatives at its Joffre, Alberta and Preeceville and Kamsack, Saskatchewan locations.
ABOUT THE BEAVER FIRST NATION
The Beaver First Nation is located near High Level, Alberta, approximately 800 kilometres north of Edmonton and consists of two reserves: Boyer River, which covers 10,500 acres and Child Lake, which encompasses another 6,983 acres of land. The Beaver First Nation presently has approximately 445 members located in the province and is a member of the North Peace Tribal Council.
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