Canada Energy has chosen to take this action in response to West Energy’s demand that the company recognizes that West Energy has received its 65% working interest in the deep rights of the four sections of the Monias prospect. The company’s situation is that West Energy has failed to complete or dispose of the test well in an appropriate means as necessitated by the agreement. Particularly, West Energy has not tested the major Montney objective which Canada Energy considers to be very prospective for commercial gas production.
If the company proves to be successful in its legal action, it will hold a 100% working interest in the deep and shallow rights of all ten sections of the Monias prospect. If it proves to be unsuccessful in its legal action it will hold a 35% working interest in the deep rights of the four sections, 100% working interest in the shallow rights of the four sections and a 100% working interest in the deep and shallow rights of the remaining six sections of the Monias prospect.
