Ryland Announces a Third Farm-Out Agreement With Triaxon to Test Bakken Formation
27 Fevereiro 2009 - 10:00AM
Marketwired
Ryland Oil Corporation (TSX VENTURE: RYD) is pleased to announce
that, through its wholly owned subsidiary Pebble Petroleum Inc.
("Pebble"), it has entered into a new farm-out agreement with
Calgary-based TriAxon Resources ("TriAxon") respecting an
additional 53 1/4 sections of Pebble's acreage adjacent to the Flat
Lake Bakken oil field in southeast Saskatchewan. This is the third
farm-out agreement between the Company and TriAxon, the first two
having been announced in Ryland's news release of October 3, 2008.
Under the new agreement, TriAxon is required to spud two test
wells, one by August 1, 2009 at a location of its choice on
Exploration License EL 812 and the second by October 15, 2009 at a
location of its choice on Exploration License EL 811. TriAxon may
elect to drill either vertical stratigraphic test wells or
horizontal wells to test the Bakken formation. TriAxon must pay
100% of the costs to drill, complete and equip or abandon the test
wells to earn a 50% working interest in the Bakken formation
underlying the test well section. In the event a vertical
stratigraphic test well is drilled, TriAxon will also earn a 50%
working interest in the Bakken formation underlying an additional
four contiguous sections. In the event a horizontal test well is
drilled, Triaxon will earn a 50% working interest in the Bakken
formation underlying an additional ten contiguous sections. Pebble
will retain a 100% working interest in all other zones. After
drilling the initial test wells, Triaxon has the continuing option
to drill additional earning wells at locations of its choice on the
remaining farm-out lands to earn on the same basis as the test
wells. If any wells are subsequently drilled on acreage in which
TriAxon has earned its 50% working interest, each of Pebble and
TriAxon will be responsible for payment of 50% of the costs of such
wells and hold a 50% working interest, subject to the provisions of
the operating agreement between the parties.
TriAxon is an established and successful operator in the Bakken
Formation in southeast Saskatchewan with a focus on developing low
permeability reservoirs with horizontal, multi-stage fracture
stimulated wells. The new farm-out agreement with TriAxon reflects
Ryland's strategy of bringing in experienced industry partners with
capital and technical expertise to participate in the exploration
and development of the Company's 389,000 acres of petroleum and
natural licenses and leases in Southeast Saskatchewan and North
Dakota.
In addition to entering into the new farm-out agreement, Pebble
and TriAxon have amended the earning provisions in their 22 section
farm-out agreement entered into in October of 2008. TriAxon has
earned the Bakken rights underlying five sections by drilling a
second test well under that agreement, after its initial well had
to be abandoned for technical reasons. Pursuant to the amending
agreement, TriAxon will earn 17 sections (as opposed to 11
sections) if it drills a third well as a horizontal well. In
addition, the spud date for the third well has been extended to
January 31, 2010 so as to follow the two test wells to be drilled
pursuant to the new farm-out agreement. TriAxon's second test well
completed under that farm-out agreement has very recently been put
on production at approximately 90 BOPD with an increasing oil cut
trend.
RYLAND OIL CORPORATION
Gerald J. Shields, President
Issued and Outstanding: 193,576,106
The TSX Venture Exchange has not reviewed and does not accept
any responsibility for the adequacy or accuracy of this news
release, and no regulatory authority has approved or disapproved
the information contained herein.
Contacts: Ryland Oil Corporation Mr. Jim Welykochy
Vice-President Corporate Development (403) 861-1242 Website:
www.rylandoil.com
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