As per the terms of the agreement, Aroway will acquire 1316751 Alberta’s certain oil and gas properties located in the Kirkpatrick Lake area consisting of 1.25 sections of land in Alberta, Canada.
The company will spud two test wells in the properties before 2012 to target the ellerslie formation and earn 100% working interest in the properties, which is subject to a 7% override on 100% of production.
Based on the 3D seismic data, Aroway has selected the light oil ellerslie prospects which have already produced over 1.39 million barrels of oil.
The company is also anticipating spudding three additional wells if the initial test well results are positive.
Aroway Energy president & CEO Chris Cooper said, "After extensive due diligence, we feel this is a low risk opportunity that we can drill in short order and add significant production to complement our existing oil production and deliver continued growth to our shareholders."
The transaction is subject to certain regulatory approvals and completion of due diligence by the Aroway.
