clarification on yamaskaproperty with specific reference to Forest Oil's drilling discovery is being awaited from QEC. I have emailed to their PR department to seek specific answers to the sharing arrangement between QEC and GMR.
My understanding from QEC's NR is that FST's gas discovery was on QEC's Yamaska property. On this said property, QEC and GMR have a 50/50 arrangement in which GMR is obliged to pay a 7.5% royalty to QEC. But if GMR chosed to, they could convert this into a 20% interest. I take this to mean that this will then replace the 50/50 plus 7.5% royalty. Bottom line, this means the conversion by GMR will give the latter 20%, while QEC takes 80%.
It is then logical to deduce that FST's drilling arrangement with QEC is subject to this prior agreement between GMR and QEC, and does not negate the binding arrangement.
I found the NR from QEC specific and clear. However I do not find the GMR NR specific and clear. Both companies had their NR's on April 1 following the FST announcement of the gas discovery.
If you read QEC's NR, they were also specific in saying that this summer FST will be doing horizontal drilling on the two wells that were done last year. QEC went on to specify the cost of $2.5 million estimated cost for doing each well and a possible maximum of 800 wells based on spacing on the said Yamaska for which FST has farmed in certain acreage.
Todate, I havenot heard from QEC.
Meanwhile, on BNN, Jean tardiff of Sprotts picked QEC as one of his top picks. He mentioned that they bought shares from $1 up to $2 plus.
Personally, I chose QEC too based on the NR's details as I could not quite put a handle on the GMR story. At best, if I understood the agreement between QEC and GMR correctly, then GMR's share is only 20%. QEC stands to gain more. GMR did have a separate agreement with FST (NR 26/2/07) where FST may earn up to 60% in GMR's Yamaska property which covers 45,381 hectares. This appears to be GMR's land, as no mention was made of QEC land. That to me appears to be a separate matter. But for now, the gas being explored is on QEC land. Period. Hope that helps.Comments welcomed!