BNP Announces Well Commitment in Central Alberta
BNP Resources Inc. has entered into an agreement with a private Canadian oil and gas company (the "Farmor") to drill a Banff test well (the "Test Well") to earn in 1,280 acres of land (the "Farmout Lands") in the Richdale area of Central Alberta.
This will be BNP's third gross well. The costs for the Test Well shall be borne 20% by the Farmor and 80% by BNP.
Upon paying 80% of the costs for drilling, casing, completing, capping or abandoning the Test Well, BNP shall earn in the drilling spacing unit 80% to the base of the Banff, subject to a gross overriding royalty convertible by the Farmor to a 30% working interest at payout. In the balance of the Farmout Lands BNP will earn 50% to the base of the Banff.
At payout the interests in all of the Farmout Lands will be 50% each for BNP and the Farmor and BNP shall be responsible for its working interest share of a 6% gross overriding royalty applicable to the Farmout Lands.
"This deal expands our Central Alberta core area. We are operating the project with a high working interest, and the Test Well has potential in several horizons. It's another good fit with our business plan," says Gregory Bilcox, President & CEO.
BNP is also pleased to announce the signing of a deal with another private Canadian company for 4,160 gross acres in Southwest Saskatchewan. On or before January 20, 2007, BNP shall purchase and reprocess a minimum of 10 kilometers of 2-D seismic data over or within a mile of the Farmout Lands.
In February 2007, BNP may elect to either shoot an additional 5 kilometers of 2-D seismic data or drill an earning well.
Drilling operations are to commence within 90 days of electing to drill.
Upon drilling, casing, completing, capping or abandoning the earning well, BNP shall earn in a pre-selected earning block comprising 1,920 acres of the Farmout Lands to the base of the deepest formation fully penetrated 100% in the drilling spacing unit, subject to a gross overriding royalty convertible by the private company to a 40% working interest at payout. In the balance of the pre-selected earning block BNP will earn 60% to the base of the deepest formation fully penetrated.
BNP shall have the option to drill one more well to earn in the remainder of the Farmout Lands on the same terms.
"Southwest Saskatchewan offers interesting opportunities. Except for shallow gas, much of the area is under-explored, with the potential for a significant prize," says Gregory Bilcox, President & CEO.
Mr. Bilcox also notes, "We are very pleased with our overall progress since our July 18, 2006 Initial Public Offering. We are exiting 2006 with a land base of approximately 31,000 gross acres and we will have drilled and cased three gross wells. We also expect to move forward with the completion and testing of the latter two wells and expect to continue in 2007 our aggressive pursuit of oil and gas opportunities."
BNP is actively engaged in the exploration for, the development and production of, natural gas and oil reserves. BNP's business strategy is to build sustainable and profitable per share growth through selective acquisitions and internally generated exploration and development drilling.
BNP's areas of operational focus have been enhanced with the addition of
Southwest Saskatchewan from its initial focus areas in the Peace River Arch
area of Alberta, the Central Alberta area and the Southeast Saskatchewan area.
- BNP Notes Results of Jensen Recompletion Well (Jan 26)
- BNP Highlights Operations at Jensen Well (Aug 11)
- BNP Undertakes Completion Work, Plans 6 Wells for Jensen Area (Jul 09)