Energy North Inc., an independent headquartered in Calgary, has entered into a joint venture agreement giving it the opportunity to earn access to lands by drilling in the Alberta foothills. It also has acquired what it called a significant land position in the project area in a joint venture project. Drilling is expected to begin nearly next year.

Last June, Energy North entered into a 50/50 joint venture agreement with an unnamed “industry partner,” to explore and develop the sweet gas potential in the Quirk Creek area of southwestern Alberta. Initial petroleum and natural gas leases owned by the joint venture in the project area were 14.8 sections (9,440 acres). Then, in August, the joint venture acquired the right to earn all the energy rights to the base of the Fernie Group in up to 14.5 sections (9,280 acres) of crown leases by drilling one test well and up to three option wells.

The right to earn was secured under a farm-in agreement from Shell Canada Ltd., in exchange for an industry standard overriding royalty in the test well. Shell has reserved the right to convert the overriding royalty to a 50% working interest in the option wells. Last month the partners also acquired an additional and complementary 26 sections (16,640 acres) of petroleum and natural gas leases in the project area. Energy North’s share of the purchase price was C$50,000. The joint venture partners also agreed to reserve a 5% overriding royalty payable to the vendor on the production of petroleum substances from the conveyed lands.

In total, Energy North now owns or has the opportunity to earn, a 50% interest in over 55 sections of land comprising approximately 35,360 acres of various crown and freehold petroleum and natural gas leases in the Quirk Creek area, located in the foothills of the Rocky Mountains southwest of Calgary. Energy North also owns working interests in several central Alberta producing properties, and in early stage exploration properties located in southwestern, eastern and the Peace River Arch areas of Alberta.

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