Aroway Energy Inc announces that it has entered into an initial agreement (the Agreement) with a private oil and gas company, 1316751 Alberta Ltd. (1316751), and the shareholders of 1316751 (the Vendors) pursuant to which Aroway will acquire certain oil and gas properties in the Kirkpatrick Lake area consisting of 1.25 sections of land in the Province of Alberta.
Aroway will drill two test wells targeting the ellerslie formation before the end of 2012 to earn a 100% working interest subject to a 7% override on 100% of production. The ellerslie prospects have been selected off of 3D seismic data, and are in a very prospective light oil fairway with an offsetting pool having produced in excess of 1.39 million barrels of oil. Aroway believes there may be three (3) additional wells to be drilled provided the initial test wells are productive. The ellerslie wells are approximately 1100 meters deep with all-weather access and pipeline and third party infrastructure nearby. In addition to the ellerslie play, Aroway will also own all the oil rights including the Viking formation rights, which nearby operators are actively drilling horizontal Viking formation wells in the area.
Chris Cooper, President & CEO of Aroway Energy commented, “After extensive due diligence, we feel this is a low risk opportunity that we can drill in short order and add significant production to complement our existing oil production and deliver continued growth to our shareholders.” Pursuant to the terms of the Agreement, Aroway has agreed to acquire all of the issued and outstanding shares in the capital of 1316751 for an aggregate of $500,000 to the Vendors. Closing of the transactions set out in the Agreement is subject to, amongst other things, the completion of satisfactory due diligence on 1316751 by the Company, and any required regulatory approvals.