The company said that its jointly owned farm-out well on Section 6-50-25 W3M is currently producing at a gross rate of approximately 70bbls/d. The well was drilled pursuant to a farm-out with Arctic Hunter Uranium (Arctic Hunter) in July 2010.
Under the terms of the farm-out, Arctic Hunter paid 100% of the costs to drill, complete and equip the well to earn a 100% working interest before payout, reserving to Alberta Star and Western Plains a convertible overriding royalty of 10% until payout.
After payout, Alberta Star and Western Plains Petroleum has the option to either convert to a 50% working interest in the well spacing unit or remain in a gross overriding royalty position.
The company and Western Plains are also planning to drill, on a 50/50 basis, four additional wells adjacent to the Arctic Hunter farm-out well, all targeting the same zone. Licensing applications for these wells are anticipated to be submitted next week, and subject to receipt of applicable approvals and rig availability, drilling of the four wells is expected to be conducted in late August and early September, 2010.
The company and Western Plains are also proposing a six well in-fill drilling program to commence in the fourth quarter of 2010 all of which are located in the Lloydminster Area of Saskatchewan. The company and Western Plains will be participating on a 50/50 basis in this drilling program on these assets.
