Sprott Resource Corp. Provides Update on One Earth Oil & Gas Inc.
TORONTO, October 20, 2010 (TSX: SCP) – Sprott Resource Corp. (“SRC”) is pleased to provide an update on the activities of its subsidiary One Earth Oil & Gas Inc. (”OEOG”), which is dedicated to pursuing oil and gas exploration and development opportunities in partnership with the First Nations.
OEOG has entered into joint venture and lease agreements in respect of significant lands on the Ermineskin First Nation (2,235 hectares) (“Ermineskin Lands”). In addition, OEOG has also entered into agreements on lands contiguous to the Ermineskin Lands (1,554 gross hectares) (“Adjacent Lands”). OEOG has also entered into a farm-in and option agreement with a private company in respect of lands which are on the Fort Belknap First Nation and other lands in the area (3,885 gross hectares) (the “Montana Lands”). OEOG retains an option to continue drilling on a rolling option basis covering over 100,000 hectares in Montana.
OEOG drilled and completed one well earlier this year on the Adjacent Lands, which tested positive for gas. OEOG intends to tie-in this well by year-end dependent on market conditions. OEOG intends to drill 6 oil and gas wells over the balance of 2010, 2 on the Ermineskin Lands, 2 on the Adjacent Lands and 2 on the Montana Lands (the “2010 Capital Program”). The wells on the Montana Lands will test the Bakken and Shaunavon zones. OEOG currently has a total of 17 drillable prospects in inventory.
To fund the 2010 Capital Program, SRC purchased 7 million OEOG common shares for $1.00 per common share as part of an $8.1 million private placement recently completed by OEOG (the “Private Placement”). The balance of the common shares issued on the Private Placement was purchased by management of OEOG and other individuals. To date, SRC has contributed a total of $11 million into OEOG and holds and 91% equity interest in OEOG (undiluted).
OEOG’s management team consists of Blaine Favel (President and CEO), Gord Harris (COO) and Stephen Austin (CFO). Mr. Favel has over 20 years experience in investment banking and First Nations relations. Both Mr. Harris and Mr. Austin have over 30 years experience in the oil and gas sector with public and private corporations.
About Sprott Resource Corp.
Sprott Resource Corp. (“SRC”) is a Canadian based company, the primary purpose of which is to invest and operate in natural resources. Through acquisitions, joint ventures and other investments, SRC seeks to provide its shareholders with exposure to the natural resource sector for the purposes of capital appreciation and real wealth preservation. SRC is well positioned to draw upon the considerable experience and expertise of both its Board of Directors and Sprott Consulting Limited Partnership (SCLP), of which Sprott Inc. is the sole limited partner. Pursuant to a management services agreement between SCLP and SRC, SCLP provides day-to-day business management for SRC as well as other management and administrative services. |
