Sahara Farmsout Blackfoot Heavy Oil Property
Sahara has entered into a Farmout and Option Agreement with Forent Energy whereby Sahara agrees to farmout its Blackfoot heavy oil property located in the Lloydminster area of Alberta to Forent. The terms of the agreement include that the Farmee (Forent) shall pay 100% of the drilling, completing, and equipping cost of the Test Well, to earn 100% interest in the drilling spacing unit before payout subject to a convertible 15% gross overriding royalty payable to Sahara. At payout, Sahara shall have the option to either convert to a 50% working interest or remain in the overriding royalty position. By drilling the Test Well, Forent shall earn an additional 50% interest in 40 acres of the Farmout Lands. Forent shall have the option to drill a second well ("Option Well") under the same terms as the Test Well to earn an additional 80 acres of the Farmout Lands. The drilling of the Test Well is subject to a favorable down spacing order being granted by the Crown on the Farmout Lands.