I bought it because of this:
On February 25, 2005, Deep Well and its subsidiary Northern Alberta Oil Ltd. ("Northern") entered into a Farmout Agreement with Surge Global Energy, Inc. (SRGG - OTCBB) in connection with the Sawn Lake area of Alberta, Canada. Pursuant to the Farmout Agreement, Surge agreed to drill a test well, at their expense, on or before 150 days from the date of the Farmout Agreement. In exchange, Surge will earn 50% of Deep Well's and Northern's working interest in the section of land on which the test well is located and five additional sections of their selection. Upon the completion or abandonment of the first Option Well drilled by Surge under the Farmout Agreement, U.S. $ 1,000,000 is payable to Deep Well as a Prospect Fee. Surge will have the option to drill another well within 60 days after the rig release of the test well in exchange for 50% of Deep Well's and Northern's working interest in the section of land on which the second option well is located and five additional sections. For a period of two years (the "Earning Period"), Surge will have the option to drill additional wells and earn 50% of Deep Well's and Northern's working interest in various sections. This can continue until Surge has drilled 10 wells, at an estimated cost of U.S. $ 15,000,000, earning up to a 40% undivided working interest in the 63 sections in the Sawn Lake area held by Deep Well and Northern.
On June 7, 2005, Deep Well completed its acquisition of 100% of Northern. Deep Well issued 18,208,875 shares to the shareholders of Northern Alberta Oil Ltd. who have tendered their shares under the terms of a Share Exchange Agreement. With this acquisition Deep Well and Northern now have 80% of 63 sections in the Sawn Lake Oils sands region, subject to the Farmout Agreement as stated above. With this acquisition Deep Well now has 51,320,343 shares outstanding.
sism.com
It seems to me DWOG has less risk than SRGG, who must take certain actions to earn their interest. Until that happens why should SRGG's mkt cap ($30.5m) exceed DWOG's ($28m)? |
