Canadian Imperial Venture reports that the Minister of Natural Resources, the Hon. Kathy Dunderdale, has agreed to extend the term of the Petroleum Lease 2002-01 ("PL 2002-01") under certain terms and conditions. Petroleum Lease 2002-01 comprises approximately 33,000 acres on the Port au Port Peninsula ("Lease Area"), which includes Newfoundland's first onshore oil and gas discovery at Garden Hill South and the exploration prospect at Garden Hill North.
The Newfoundland and Labrador Government has agreed to extend PL 2002-01 for an additional 5-year term under the following terms and conditions:
- That the parties to the agreement commence a drilling program in the Lease Area no later than August 12, 2008 and commence and maintain production in the Lease Area without cessation, except for a period totaling two years between August 12, 2008 to August 12, 2012;
- The parties commit to spend a minimum of $10,000,000 on a work program that includes a well in the Lease Area;
- The parties agree to pay a refundable security deposit of $500,000 against the $10,000,000 work program.
By prior commitment, the parties will commence a geophysical program at Garden Hill North in August 2007 for a minimum expenditure of $2,500,000.
"I am delighted with this extension which will trigger an aggressive work program in excess of $12.5 million in western Newfoundland," said Steve Millan, Chairman and CEO of CIVC.