NEWSLooks like David Forrest is putting some money together for drilling without having to go to the market for cash by way of a share dilution.
Growth is growth albiet slowly. It is heavy oil after all.
Calgary, Alberta CANADA, Nov 21, 2011 (Filing Services Canada via COMTEX) --Western Plains Petroleum Ltd. (WPP - TSX Venture)("Western Plains" or the"Company") announces that it has entered into a farmout agreement (the"Agreement") with an arm's length privately held oil and gas limited partnership(the "Farmee") to farmout its 50% net interest in petroleum and natural gasrights in a drilling spacing unit located in the Landrose area of Saskatchewan(the "Lands"). Western Plains holds a 50% net interest in the Lands with AlbertaStar Development Corp. ("Alberta Star") also holding a 50% net interest.
Under the terms of the Agreement, the Farmee has agreed to fund the costs ofdrilling, completing and equipping one test well (the "Test Well") on the Landsto earn a net 17.5% interest after payout (a net 35% before payout). WesternPlains has agreed to contribute all of its interest (50% net interest) incertain oilfield equipment to equip the Test Well, the parties having agreedthat the value of such interest is $60,000 or 15% of the estimated $420,000costs of the Test Well. After pay-out, Western Plains will hold a 35% netinterest in the Test Well (15% net interest before pay-out). Alberta Star isparticipating in the drilling, completion and equipping of the Test Well inrespect of its 50% net interest.
Western Plains was designated as operator under the Agreement in respect ofthe drilling, completion and equipping the Test Well, which is expected to bespudded by the end of November, 2011.
Western Plains has also entered into an agreement to sell its 50% undividedworking interest in the Edam property in west central Saskatchewan to itsworking interest partner on the property, a private Calgary-based limitedpartnership (the "Partnership"), for the cash consideration of $400,000.00,subject to industry standard adjustments, plus applicable taxes, based oneffective date of November 1, 2011. The Edam property consists of 40 acres (20acres net to the Company) and one producing heavy oil well (0.5 well net to theCompany). The Company originally earned its working interest pursuant a farm-inagreement with the Partnership whereby it paid 50% of the costs of the drillingand completion of one (1) Test Well, together with 50% of the Partnership'sout-of pocket costs related to the acquisition of the Edam property at a Crownland sale.
The cash proceeds from the sale of the Company's interests in the Edamproperty will be applied to the working capital of the Company. Closing issubject to standard industry conditions and regulatory approvals.