Gentry Resources Ltd. Announces Major Exploration Agreement
CALGARY, May 23 /CNW/ - Gentry Resources Ltd. is pleased to announce a
significant exploration agreement, with Rocky Mountain Energy Corp. (the
"Farmor"), on two contiguous blocks of land totaling 55 sections (35,200
acres) of deep hydrocarbon rights. The property, located in southern Alberta,
is held by a major international corporation that retains a sliding scale
royalty and certain back-in rights.
The prime objective on these highly prospective lands is gas from
Devonian-aged targets and both gas and oil from Mississippian-aged targets.
The earning provisions of the agreement call for Gentry to drill a minimum of
five wells as well as acquiring 17 square kilometers of new 3D seismic. The
Company has access to 3D seismic over large tracts of this land base,
including coverage over several wells that have individually produced in
excess of 8 bcf. Several prospects and leads have already been identified that
show seismic character consistent with nearby highly productive Mississippian
and Devonian reservoirs.
Gentry will operate this asset and has set aside capital and technical
resources for this program. Gentry will begin exploration immediately and
anticipates drilling all five exploration wells by the fourth quarter of 2001
to fulfill the earn-in commitment. Following earn-in, Gentry will continue to
operate and explore the remaining unearned lands under a rolling option
scenario. Upon completion of the initial wells and seismic program, Gentry
will have earned 50% of the Farmor's working interest in the lands and share
ongoing costs on a pro rata basis. Under the terms of the agreement, each
Devonian test will earn two sections and each Mississippian test will earn one
section of land.
A midstream company is currently laying a pipeline through the middle of
these lands. This pipeline will feed gas to a nearby plant that will, with
slight modifications, have additional production and processing capacity.
Gentry's President and C.E.O. stated, "The addition of this large farm-in
to Gentry's current exploration activities demonstrates Gentry's focus on
higher impact operated projects."
For further information: Hugh Ross, President & Chief Executive Officer,
(403) 264-6161, Gordon McKay, Vice-President, Exploration, (403) 264-6161,
Roger Fullerton, Manager, Investor Relations, (952) 929-7243, Website:
www.gentryresources.com, Email: gentry@gentryresources.com;
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