Two farm-in agreements are with Elkwater Resources Ltd. The first project is in the Esther area of Alberta, in which Tower will earn a 100% interest in the Farmout lands reserving unto Elkwater a convertible gross overriding royalty of 1/300 (2.5-7.5%) oil and 7.5% gas before payout which may be converted to a 45% interest after payout. The target formation is the Viking, which has offset producing oil wells.
The second Elkwater Farm-in is in the Empress area of Alberta. The company intends to first shoot two additional seismic lines to be interpreted in conjunction with existing seismic data to ascertain the viability of two potential drilling targets. Tower will earn a 50% interest by paying 100% of the drilling costs. The Empress project is a Belly River gas target in which the company will earn an interest in two sections and in which a second potential well has already been identified.
The third farm-in is with Poplar Point Energy Ltd. Tower will earn an estimated 4% working interest (based on current AFE's) with the expenditure of $300,000 in the drilling, completion and tie-in of a well in the West Central area of Alberta. It is Towers objective to actively explore other development opportunities with Poplar Point Energy Ltd.
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