2010-08-31

Transaction Type
Sellers
Buyers
Post Date
Estimated Price
0MM
Description

To farm in to 22 sections of land within the Wapiti Cardium light oil resource play fairway; Seaview to pay 100% of capital costs to drill.

Seaview Energy Inc., Calgary, (Toronto Venture: CVU-A) has entered a farm-in agreement that significantly expands its position in the Wapiti Cardium light oil play.

The agreement provides Seaview with rights to farm in on 22 sections of land within the Wapiti Cardium light oil resource play fairway. Under the terms of the farm-in agreement, Seaview will pay 100% of the capital costs to drill, complete and tie-in with the ability to earn all of the seller's interest subject to an industry standard royalty on production.

Seaview's initial commitment is to drill two earning wells, with subsequent rolling options to earn the remainder of the farm-in lands. Contingent upon Seaview's sole option to drilling all wells under the option phase, the company has exposure to earn up to 10.5 net sections of land with Cardium oil and natural gas rights.

The location of the farm-in lands represents a continuation of Seaview's strategy to accumulate a large, continuous land position targeting high-quality, light oil in the Wapiti Cardium fairway. Execution of this agreement further strengthens Seaview's presence in the area by providing a contiguous land block, which further expands its producing assets in Wapiti.

Including the option lands under this agreement, Seaview's opportunity base in Wapiti will have the following characteristics:

  • Exposure to earn up to 41 sections (20.8 net) of prospective Cardium light oil rights;
  • Significant increase in gross potential locations to over 164 (83 net) horizontal development locations; and
  • Improved operational focus by consolidating a large contiguous land position directly offsetting the company's recent successful Cardium exploration activity.

Continued success in developing the Wapiti Cardium light oil play could add significant incremental upside to Seaview's current asset base. The company will continue to focus on proving the commerciality of this play in 2010.