CANADIAN OILPATCH / NIKO RESOURCES LTD.
ANNOUNCES THAT IT HAS ENTERED INTO AGREEMENTS
WITH CUBACAN EXPLORATION INC. AND INTERCAP RESOURCES MANAGEMENT
CORP.
1996-12-04
CALGARY, ALBERTA
Niko Resources Ltd. ("Niko", or the "Company") is pleased to
announce that it has entered into agreements with Cubacan
Exploration Inc. ("Cubacan") and Intercap Resources Management
Corp. relating to the exploration of Cuban Block 17, a 888,460 acre
petroleum concession located in northeastern Cuba and held by
Cubacan.
Cubacan is a public company based in Calgary and Intercap is a
public company based in Vancouver. Cubacan trades on the Alberta
Exchange and Intercap trades on the Vancouver Exchange.
Over 300 kms of original seismic date and 400 kms of new 2-D
seismic data shot by Cubacan in 1996 have been used to identify a
number of significant shallow and deep drilling targets in this
highly prospective oil prone exploration block.
Niko will participate in a new seismic program in December 1996
that provides detailed information on several of these anomalies
and is expected to provide a location for the initial Block 17 test
well.
The Following is a summary of the terms of the agreements.
Intercap has advanced to Cubacan $500,000 as a loan, which is
secured by a general security agreement and a guarantee of
Endeavour Resources Inc, ("Endeavour"), an Alberta Pubic Company.
The loan which bears interest at 12% per annum is due January 10,
1997 and is convertible into shares of Endeavour at $0.40 per share
or shares of Cubacan at $0.30 per share.
Niko will be responsible for 15% of the total cost of the new
seismic program, which is estimated by Cubacan to be approximately
US $690,000.
Niko as to 40% and Intercap as to 60% have further agreed to
advance to Cubacan a refundable deposit of US $300,000 which is to
be used by Cubacan to satisfy a letter of credit obligation under
its petroleum concession.
Niko has the option to earn up to 15.0% interest in the initial
test well by paying 20% of the costs. Similarly, Intercap has the
option to earn up to a 22.5% interest in the test well by paying
30% of the costs.
The options are execrable 7 days after interpretive data has been
delivered with respect to the new seismic program. Niko and
Intercap have the right to pick up the proportionate share of the
other if the other does not wish to exercise its option for its
full share. To the extent that Niko does not elect to participate
in the initial test well, Niko's remaining share of the deposit
will be treated as a secured demand loan repayable by Cubacan 45
days after the election and bearing interest at 12%. The loan may
be converted into shares of Cubacan or Endeavour in certain
circumstances.
If Niko participates in the initial test well, Niko will continue
to have the option to participate in further wells on Block 17 by
paying 15% of the costs of such wells to earn 15%, subject to
certain cost recoveries by Cubacan, if the initial test well is
successful.
The interests of Cubacan, Intercap and Niko in the concession are
subject to a 2% gross overriding royalty payable to the government
of Cuba.
The transaction is subject to regulatory approval.
On behalf of the Board
Niko Resources Ltd.
Robert R. Hobbs
Director
The Alberta Stock Exchange has not reviewed and does not accept
responsibility for the adequacy of accuracy of this release. |
