Carmen Energy farm-in on HamburgCarmen Energy Inc. announces farm-in on Hamburg Area, Alberta locations
Jul 19, 2011 4:33:00 PM
CALGARY, July 19, 2011 /CNW/ - Carmen Energy Inc. (TSXV: CEI) ("Carmen" or the "Corporation")is pleased to announce that the Corporation has entered into a farm-inagreement to drill an exploratory well in the Hamburg Area of Albertawith an option for follow-up drilling. The election was made pursuantto the exercise of an option to acquire 3D seismic on a minimum of foursquare miles covering the Option Lands
Carmen has entered into afarm-in with four private companies (collectively the "Farmor") whichmay result in Carmen earning a 50% working interest in two optionblocks comprising four sections or 2,560 acres of natural gas andliquids-rich prospective lands in the Hamburg Area of Alberta. TheFarm-in agreement allows Carmen to become the operator and earn a 50%working interest in one option block comprising two sections or 1,280acres of the prospect by incurring 100% of the costs to drill to thecontract depth, abandonment, capping or completion, equipping andtie-in to the inlet of a processing plant for an option well prior toFebruary 15, 2012. The Corporation can earn the second option blockconsisting of an additional two sections or 1,280 acres, subsequent tofulfilling the Corporation`s obligations for the first option well, byelecting to exercise its option to drill the second option well within90 days of rig release date for the first option well and spudding thesecond option well within nine months of the Corporation`s election todrill the same. Carmen will earn in on the first and second optionblocks to the base of the deepest formation penetrated by the first andsecond option well drilled on the respective option block.
The Hamburg Area option wells are subject to Crown royalties and aconvertible sliding scale (5 per cent minimum - 15 per cent maximum) oncrude oil and 15% on all other petroleum substances overriding royaltypayable to the Farmor.
Carmen`s President andChief Executive Officer, Brian Doherty stated that, "Carmen is pleasedto have obtained a multi section position within this very prospectivearea of the Province. The Hamburg Area has a great history ofsignificant and prolific production and the area has recently seen anincrease in land sale prices. We expect the Hamburg Area to become acore area for us."