VANCOUVER, Feb. 21, 2012 /CNW/ - Great Pacific International Inc. ("GPI") (TSXV: GPI) is pleased to report that GPI Oil & Gas Inc., a 100% owned subsidiary of the Company, has reached an agreement with an independent operator to farm in on a leasehold interest held by the Company in North Central Alberta.
The Independent Operator will earn a 60% interest in the lease by re-entering an existing well. The Independent Operator will pay 100% of the costs to re-enter this well. Great Pacific has agreed that the Operator will have 100% interest in the re-entered well and will have a 60% interest in any additional wells. GPI will retain a gross overriding sliding scale royalty interest of 5% to 15% on the re-entered well.
Should the Independent Operator issue a notice that they intend to drill another well, GPI will have the option of participating to our 40% interest or converting our interest to a 5% to 15% gross overriding royalty.
Historically, the well subject to re-entry had produced just over 30,000 Bbls of oil over its operating period, while other similar wells in the area had produced in excess of 100,000 Bbls. Based upon it's evaluation of nearby wells and geophysical data, the Independent Operator believes that oil is likely present in the formation that it is targeting. The historical results of these wells can not be considered indicative of what may be expected from the re-work of this well.
Our farm-in partner, an independent operator has over 40 years of experience in the oil and gas industry in Alberta.
We seek safe harbor.
For further information:
Thal S. Poonian, President, at 604-940-9190, toll free 1-877-942-8765 or by email [email protected].