WINNIPEG, April 13 /CNW/ - Donald Benson, President & CEO of Nordic Oil and Gas Ltd. ("the Company" or "Nordic") announced today that the Company has entered into a strategic alliance with Western Plains Petroleum Ltd. (TSXV:WPP) ("Western Plains"), whereby Western Plains will acquire a 50% interest in Nordic's land holdings and heavy oil wells in Lloydminster, Alberta. In consideration of this agreement, Nordic will receive an aggregate of $2,500,000 from Western Plains, consisting of $2.1 million in cash and $400,000 of Class A Common Shares of Western Plain. Nordic will retain the other 50% interest in the Company's Lloydminster land holdings and heavy oil wells.
Western Plains is a Lloydminster, Alberta, based junior heavy oil producer with interests located in the Lloydminster area in both Saskatchewan and Alberta. They are a leading operator of heavy oil wells in Lloydminster, and in conjunction with this deal they will become the new operators on all of the Nordic Wells located in Lloydminster.
"This is a deal of significant magnitude and importance for Nordic Oil and Gas Ltd.," Mr. Benson stated. "Firstly, it provides us with a much needed influx of capital which will allow us to move forward on numerous fronts. Secondly, we could not be more pleased to be associated and working with Western Plains, an experienced, competent and successful operator in the Lloydminster region.
"I am confident that with their skill and expertise, we will see the value of our property strengthen considerably in the coming months, leading to solid cash flow and many new growth opportunities for us in Lloydminster," he added. "Furthermore, I see this strategic alliance as a stepping stone to other deals with Western Plains down the road."
It is anticipated that Western Plains will commence bringing on the five new wells that Nordic drilled at the end of 2009 as soon as possible, resulting in almost immediate production. In addition, Western Plains will also turn its attention to some of the maintenance issues facing Nordic's other nine wells, meaning that all 14 wells are expected to be on full production in short order.
"We are indeed excited at the opportunity of working with Nordic Oil and Gas Ltd in Lloydminster," said David Forrest, President and Chief Executive Officer of Western Plains Petroleum Ltd. "Our strength has always been that of an operator and together, with Nordic's strong land holdings in the area, I'm sure both companies will significantly benefit from this agreement."
Western Plains' President & CEO Dave Forrest has over 15 years experience in developing heavy oil plays located around Lloydminster and Maidstone, Saskatchewan. Mr. Forrest founded IC Energy Ltd., a private oil and gas exploration and production company, building production to approximately 750 BOEs(1) per day, with P&NG leases aggregating 5,440 acres, before selling to Arsenal Energy Inc. on March 31, 2005, for a purchase price of $10 million.
The completion of the transaction is subject to receipt of all required regulatory and securityholder approvals, including the approval of the TSX Venture Exchange.
About Nordic Oil and Gas Ltd.
Nordic Oil and Gas Ltd. is a junior oil and gas company engaged in the exploration and development of oil, natural gas and Coal Bed Methane in Alberta and Saskatchewan. The Corporation is listed on the TSX Venture Exchange and trades under the symbol NOG. Nordic was one of the "2008 TSX Venture 50" companies, a ranking of the top 10 public venture capital companies in five industry sectors listed on the TSX Venture Exchange.
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 the contents of this News Release.
(1) The term BOEs may be misleading, particularly if used in isolation. A
BOE conversion ratio of 6 Mcf: 1 barrel is based on an energy
equivalency conversion method primarily applicable at the burner tip
and does not represent a value equivalency at the wellhead.
This press release contains forward-looking statements with respect to Nordic Oil and Gas Ltd. properties, and matters concerning the business, operations, strategy, and financial performance of Nordic. These statements generally can be identified by use of forward-looking words such as "may", "will", "expect", "estimate", "anticipate", "intends", "believe" or "continue" or the negative thereof or similar variations. Such forward-looking statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations, including that the estimates and projections regarding the properties are realized. Forward-looking statements are based on a number of assumptions which may prove to be incorrect. Unless otherwise stated, all forward looking statements speak only as of the date of this press release and Nordic does not undertake any obligation to update such statements except as required by law.
SOURCE Nordic Oil & Gas Ltd.
For further information: For further information: Don Bain, Corporate Secretary, Nordic Oil and Gas Ltd., Tel. (204) 229-7751, Fax: (204) 943-1829, E-mail: firstname.lastname@example.org, www.nordicoilandgas.com