Under the terms of the agreement, Brigham will fund 100% of the drilling and completion costs of the initial two well horizontal drilling program. Brigham will carry American and North Finn, LLC for their respective 45% and 5% shares of all drilling and completion costs. Brigham will own a 50% interest in each of the first two wells with American owning 45% and North Finn owning 5%. Upon completion of the two well program, plus an additional $1 million of capital expenditures in the AMI project area by Brigham, Brigham will earn 50% of American's 90%, and 50% of North Finn's 10% working interests in the entire project AMI.
American anticipates that the Krejci 3-29 well could take 30 to 45 days to drill and evaluate at a total cost of between $3 million to $3.5 million. The second well is currently expected to commence within 120 days from rig release of the first. Any subsequent wells will be operated by either American or Brigham, depending on their location within the project area, and will be funded and owned on the basis of American 45%, Brigham 50% and North Finn 5%.
American Oil & Gas, Inc. is an independent oil and natural gas company engaged in exploration, development and production of hydrocarbon reserves primarily in the Rocky Mountain region.
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