Down the road after the payout.
August 28, 2012 – Petro One Energy Corp. (POP.V) is pleased to report that it has entered a Farmout and
Royalty Agreement with a senior oil company on its 100% controlled J10 property at Bromhead,
Saskatchewan. The agreement calls for the farmee to drill an earning horizontal well in the Frobisher or
Midale formation by March 31, 2013. By paying 100% of the drilling and completion costs, the farmee will
earn a 100% interest in the Test Well Spacing Unit to the base of the lowest formation penetrated, both before
and after Payout, subject to a 10% gross overriding royalty (the “GORR”) in favor of Petro One. The GORR
may be converted at the option of Petro One into a 30% working interest in the initial test well within 30 days
of receiving notice of Payout, and a 40% working interest in all subsequent wells after receiving notice of
Payout.
If the farmee drills the Test Well to the contract depth, it will have 90 days from the rig release date to elect to
drill a second well, to be spudded within 90 days after that election, by paying 100% to earn a 100% interest in
the Option Well Spacing Unit to the base of the lowest formation penetrated, both before and after Payout,
also subject to a 10% gross overriding royalty (the “GORR”) in favor of Petro One. The GORR on the second
well may be converted into a 40% working interest at the option of Petro One within 30 days after receiving
notice of Payout. Third and subsequent wells may be elected by the farmee under the same terms as the second
well.