Cerus Energy commits $10.5-million to drill seven wells Cerus Energy commits $10.5-million to drill seven wells
2017-03-31 12:13 ET - News Release
Mr. Mackenzie Loree reports
Cerus Energy Group Ltd. has entered into an agreement with a third party for the commitment to spend up to $10.5-million to drill, frack, test, complete and equip up to seven one-mile-long horizontal test wells on one of the operator's project areas. The drilling program will consist of drilling, fracking, completing and equipping seven one-mile-long horizontal test wells on the project lands. This will be phase 1 on a project that has identified an additional 27 drilling locations on the project lands. The primary target is medium gravity (21 degrees) oil. Drilling is expected to commence immediately after the spring breakup of 2017.
Under the terms of the agreement, Cerus will finance through the company's development finance platform (DFP) 100 per cent of the development cost up to $10.5-million for the costs incurred to drill, frack, test, complete and equip up to seven wells on the project lands. The DFP agreement will entitle Cerus to 80 per cent of the project's net revenue until an undisclosed penalty is recovered from the project. Postpayout, the DFP agreement will convert from its net profits interest to a non-convertible 5-per-cent gross overriding royalty in the phase 1 wells and their respective drilling spacing units.
Under the terms of the agreement, Cerus will have the first right of refusal to finance additional phases of development drilling on the project lands on the same terms and conditions as for the phase 1 drilling program.
About Cerus Energy Group Ltd.
Cerus is a Tier 2 Canadian-based oil and gas exploration company with property assets in both Alberta and Saskatchewan.