Conditions of the Letter Agreement between the companies provide that Forest Oil may earn up to 60% working interest by contributing capital to a drilling joint venture. Gastem plans to commence operations on two wells in this area in 2007, the first of which must be drilled prior to June and the second well would be drilled later in the year. Depending on the results of these two exploratory wells Forest Oil may conduct additional testing and commit to additional exploratory operations in order to earn this working interest. The Letter of Agreement also provides for future project cooperation in the Quebec area.
Gastem considers the Letter of Agreement important for its Yamaska Property as well as for other projects in Quebec.
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