Trading Symbol: BEY - TSX: V
CALGARY, Feb. 18 /CNW/ - Blacksteel Energy Inc. ("Blacksteel" or the "Company") is pleased to announce that, after extensive geological and geophysical review, it has signed a Farmout and Participation Agreement (the "Farmout") with a Calgary based private oil and gas company. Pursuant to the Agreement, Blacksteel will earn a 22.22% working interest, after payout, subject to a gross override, in a quarter section of land in the Devon area of Alberta for consideration of 33.33% of all costs associated with drilling, completing, tying-in and bringing the well into production. The target horizon of the opportunity is the Leduc oil formation. Blacksteel's participation in the Farmout is estimated at $500,000.
Subsequent to entering the Farmout, to reduce its financial commitment to the Farmout, Blacksteel entered into a sub-participation agreement with a non-arm's length private company (the "Third Party"). The Third Party will earn 30% of Blacksteel's interest (6.67% of the Farmout) for consideration of $150,000 (10% of the estimated costs of the Farmout). As a result, Blacksteel will earn a 15.55% working interest for consideration of 23.33% of the associated costs of the Farmout, resulting in a total estimated cost to Blacksteel of $350,000. Chris Scase, a director of Blacksteel, is the President of the Third Party.
The Farmout helps Blacksteel in its strategy of diversifying its asset base and looking for opportunities for short term cash flow generation.
Blacksteel is a junior oil and gas company focused on oil sands development. Its principal business activity is the exploration, exploitation, development and production of petroleum and natural gas resources in the Western Canadian Sedimentary Basin. The Company has a 100% working interest in 22 sections (14,080 acres) of Crown oil sands leases in the Peace River area of northern Alberta and a working interest in a natural gas producing property in Grassland, Alberta, approximately 180 km north of Edmonton, Alberta.
ON BEHALF OF THE BOARD OF DIRECTORS OF
BLACKSTEEL ENERGY INC.
(signed) "Walter Wakula"
Walter Wakula, Chairman of the Board
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Advisory Regarding Forward Looking Statements
This news release contains forward-looking statements which include, but are not limited to: statements regarding operations plans and outlook, expectations or other statements that are not statements of fact. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it cannot give any assurance that such expectations will prove to be correct. Results of the Company may be affected by a variety of variables and risks associated with oil and gas exploration, production and transportation, such as loss of market, volatility of oil and gas prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, ability to access sufficient debt and equity capital from internal and external sources, ability to replace and expand oil and gas reserves, ability to generate sufficient cash flow from operations to meet its current and future obligations, and risks associated with potential future lawsuits and regulatory actions made against the Company; as a consequence, actual results could differ materially from those anticipated or implied in the forward-looking statements.
The Company's forward-looking statements are expressly qualified in their entirety by this cautionary statement and are made as of the date of this news release. Unless otherwise required by applicable securities laws, the Company does not intend nor does it undertake any obligation to update or review any forward-looking statements to reflect subsequent information, event, results or circumstances or otherwise.
SOURCE BLACKSTEEL ENERGY INC.
For further information: For further information: Jacques Soroka, President, CEO and Director, Blacksteel Energy Inc., Phone: (403) 453-0060