Ontex And Pifher Resources Form Corporation To Acquire Natural Gas Leases
Toronto, Ontario - Monday, October 23, 2000, 7:16 PM EDT
Listings: TSE and CDNX, Symbol "ONT"
Issued Capital: 39,036,506 Common Shares
23 October 2000
ONTEX Resources Limited and Pifher Resources Inc. have formed a
new corporation, 1434503 Ontario Inc. ("Newco"), which will
acquire gas and oil leases covering approximately 2,000 acres
situated in the Bayham Township, Ontario from Southern Ontario
Natural Gas Limited ("Southern"). The leased lands lie Northeast
of the village of Port Burwell and Southeast of Vienna.
Pursuant to an agreement, as amended, among Ontex, Pifher, Newco
and Southern, Newco will:
(i) acquire an undivided 50% interest in the leases following the
drilling of the first four wells on the lands affected by the
leases which are required to be drilled no later than 18 months
from the date of the agreement for the payment of $33,333 cash
and the transfer and issuance of 33,333 common shares of Pifher
upon signing of the Agreement; and
(ii) have the option to acquire an additional undivided 25%
interest in the leases upon completion of the drilling of an
additional 2 wells within a period of no later than 30
months from the date of the agreement and the payment of
$33,333 and the assignment and issuance of 33,333 common
shares of Pifher on or before January 3, 2001; and
(iii) have a second option to acquire the remaining undivided
25% interest in the leases upon completion of the drilling
of an additional 2 wells within a period of no later than 30
months from the date of the agreement and the payment of
$33,334 and the assignment and issuance of 33,334 common
shares of Pifher on or before January 3, 2001.
If Newco fails to meet its drilling obligations or Newco or Ontex
and Pifher on behalf of Newco fail to pay the cash and transfer
and/or issue the shares of Pifher to Southern, any interest in
the Lease earned by Newco shall revert back to Southern.
Southern will reserve a gross overriding royalty of 5% until
Newco has recovered all capital costs ("Capital Costs") relating
to the drilling of the 8 wells on the said Leases and,
immediately following the earlier of the payout of the Capital
Costs or five years from the date of the agreement, the royalty
in favour of Southern shall be increased to 10%. The landowners
(ie. the lessors) have reserved a royalty of 5% of the net
revenue from all gas and associated hydrocarbons produced from
each well drilled on the lands under lease and a royalty of 12.5%
of the net revenue from all oil and minerals recovered from the
lands under lease.
Mr. Robert B. Hutt, HBSc, Newco's consulting geologist, has
proposed specific locations for the first 8 wells to be drilled.
The estimated budget for the drilling, stimulation (where
necessary) and pipe-lining of the 8 wells is approximately $1.65
million and is to be funded jointly by Ontex and Pifher and
through equity funding to be raised by Newco.
Newco is owned 50% by each of Ontex and Pifher. Southern is a
corporation controlled by George Chilian, who also serves as a
director of Ontex and Pifher.
The agreement gives Ontex an opportunity to extend its natural
resource base by acquiring a significant long-term interest in
the rapidly expanding natural gas market in North America.
Spudding of the first well is expected to commence by
mid-November. Land conditions in the Bayham area are very
amenable for drilling operations throughout winter months.
Ontex is also pleased to announce that it has retained John P.
Thompson & Associates to assist the company with its ongoing
drilling programs in North-western Ontario and to prepare a new
resource estimate on the Brookbank gold deposit.
Company Contact:
Gary Conn Ph: (519) 455-8127 (in London, Ontario)
Executive Vice-President Fax: (519) 455-1846
Ph: (416) 360-4031 (in Toronto)
Fax: (416) 360-4034
Please also visit our website at: www.ontexresources.com.
ONTEX RESOURCES LIMITED
[signed]
Gary Conn, Executive Vice-President
ONTEX RESOURCES LIMITED
(Mining, Mining)
ontexresources.com
TSE: ONT 0.550 0.050
V: ONT 0.880 0
Add this organization to my portfolio
Click here for a printable version
Disclaimer
--------------------------------------------------------------------------------
© 2000 BCE Emergis |
