News

July 09, 2009

Admiral Bay Signs A US$5.75 Million Farm-Out Deal To Drill 50 Wells On Its Kansas Properties

Admiral Bay Resources has had a few tough years, largely because until late 2007 a chronic cash shortage crippled its ability to work up its portfolio of non-conventional gas assets in Kansas and Pennsylvania. Perversely, now that most companies are reeling from the doubly whammy of choked off credit markets and softer US gas prices, the TSX-Venture-listed firm is starting to motor, in May spending US$2.1 million on the Thayer properties in Kansas and, most recently, securing a farm-out deal worth US$5.75 million to progress the Thayer and Mound Valley projects.

The farm-out has been signed with Italian energy investment company Euramerica Energy Inc, which has agreed to drill 25 wells in 2009 and 25 wells in 2010 on the Thayer and Mound Valley properties.  This commitment will cost the Italian firm US$5.75 million, earning it an 80 per cent working interest in each well. Euramerica, which will earn the interest only in the wellbore and associated space for each well it funds, will pay all the costs of drilling and completing the wells for a...