The relatively underexplored Woodland and Swan River lands are located 250 and 180 miles, respectively, northwest of Edmonton. Both are considered highly prospective for oil and gas from multiple zones at shallow and medium depths (300-2,000 meters). The Woodland property is also prospective for bitumen. It is located less than 10 miles from a major heavy oil project at Cadot.
Lagasco will be proceeding immediately with geological and geophysical assessments toward developing drilling opportunities analogous to existing successful oil/bitumen and gas development on adjacent lands. The company has engaged the services of the former Brigus Resources Ltd. management team to assist in managing the development opportunity going forward. Brigus was a successful grassroots drilling and production company purchased by Choice Resources Corp. in 2003. Former Brigus principals John Uncles and Brian Hunter have extensive experience in exploration and development plays of the Woodland and Swan River types.
Pursuant to the LOI, Lagasco will enter into formal agreements with Calgary-based Black Horn Resources Ltd. and its two wholly-owned subsidiaries (collectively "BHR") to acquire BHR's 100% working interest in existing farmout agreements with the Woodland and Swan River bands. On or before closing, the company will pay $1.85 million to Indian Oil and Gas Canada (IOGC) on behalf of BHR in connection with the issuance of permits to explore and develop the Woodland and Swan River reserve lands. Additionally at closing, Lagasco will pay and issue to BHR approximately $4.1 million in a combination of cash and common shares in the capital stock of the company, representing sunk costs on acquiring the acreage. Closing is expected to be on or before Sept. 30, 2006, and will be subject to certain conditions including, but not limited to, due diligence and to the approval of the TSX Venture Exchange.
"This acquisition represents a huge step forward for the company, giving it a prime core area to develop,” said D. Barry Lee, Lagasco’s president and CEO. “With Woodland and Swan River we have extensive contiguous land in very prospective areas--and we bring a competent proven management team to the mix. In today's heated market, land and management are the keys to successful growth.”
Lagasco Corp. is a junior oil and gas exploration and production company currently producing gas from its Windy Lake joint venture project in northern Alberta.
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