Oil for America entered into an agreement to acquire leases for the land where the Slope County prospects are located, giving the lessor an overriding royalty interest of 20%, and those leases were later assigned to Coastal Petroleum.
The terms of the farmout agreement between Western Standard and Coastal Petroleum calls for the leases to be assigned to Western Standard and a back in working interest to Coastal Petroleum of 20% after payout. The leases cover all rights below the Tyler formation, including the Lodgepole formation, with an 80% net revenue interest to Western Standard.
Dan Bauer, CEO of Western Standard Energy, said: Following on the recent gas discovery with Coastal Petroleum in Valley County, Montana, as a result we will move forward and expand our partnership.
