Desmarais announces strategic Virginia hills farm-in agreement
Friday, Mar 23, 2012CALGARY, March 22, 2012 /CNW/ - Desmarais Energy Corporation (TSXV: DES) (the "Corporation" or "Desmarais") is pleased to announce that it has entered into a farm-in agreement (the "Farm-in Agreement") with a private oil & gas company ("Privco") to drill and test the Beaverhill Lake formation on lands located in the Virginia Hills area of Alberta. The Virginia Hills area has been the focus of heightened industry activity and is emerging as a premier light oil resource play.
The Farm-in Agreement provides the Corporation the right to earn 100% of Privco's 50% working interest in all zones in the farmout lands (the "Farmout Lands"), totaling approximately 320 gross acres, by paying 100% of Privco's costs to drill, case and complete two horizontal wells on the Farmout Lands. The first well must be spud by December 31, 2012 and the second well must be spud by December 31, 2013. Privco will retain a sliding-scale royalty ranging from 5% to 15% on the crude oil (and 15% on all other hydrocarbon production) produced, saved and marketed from such wells. Mr. James Long, a director of Desmarais, is a non-controlling shareholder, and a director and officer, of Privco.
Reader Advisory: This press release contains forward looking statements and forward looking information (collectively "forward looking information") within the meaning of applicable securities laws with respect to the Farm-in Agreement, including the timing relating to the earning commitments thereunder; the potential royalty retained by Privco; and the target zones relating to Desmarais' potential drilling commitments. Readers are cautioned that the foregoing list of factors should not be construed as exhaustive. Forward looking information typically uses words such as "anticipate", "believe", "project", "expect", "goal", "plan", "intend" or similar words suggesting future outcomes, statements that actions, events or conditions "may", "would", "could" or "will" be taken or occur in the future.
The forward looking information is based on certain key expectations and
assumptions made by Desmarais' management, including expectations and assumptions concerning Desmarais having sufficient capital to meet its commitments under the Farm-in Agreement, receipt of all necessary approvals for completion of the Farm-in Agreement; and the completion of the earning commitments under the Farm-in Agreement in a timely fashion.
Although Desmarais believes that the expectations and assumptions on which such forward looking information are based are reasonable, undue reliance should not be placed on the forward looking information because Desmarais can give no assurance that they will prove to be correct. Since forward looking information addresses future events and conditions, by its very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but
are not limited to, failure to obtain the necessary regulatory and other
approvals and on the timelines planned and Desmarais inability to secure
financing to fund its commitments at all, or on terms satisfactory to Desmarais.
Management has included the above summary of assumptions and risks related to forward looking information provided in this press release in order to provide securityholders with a more complete perspective on Desmarais' future operations and such information may not be appropriate for other purposes.
Although Desmarais believes that the expectations represented in such forward looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. The Corporation's actual results, performance or achievement could differ materially from those expressed in, or implied by, the forward looking information and, accordingly, no assurance can be given that any of the events anticipated by the forward looking information will transpire or occur, or if any of them do so, what benefits that the Corporation will derive there from.
Readers are cautioned that the foregoing lists of factors are not exhaustive. Additional information on these and other factors that could affect our operations or financial results are included in reports on file with applicable securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com).
These forward looking statements are made as of the date of this press release and Desmarais disclaims any intent or obligation to update publicly any forward looking information, whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws.
Neither 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.
SOURCE Desmarais Energy Corporation
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