Nordic Petroleum’s partner Mercom Oil Sands is now listed in London and has secured funding for the joint work program for proving and verification of resources and reserves.
As previously announced, we entered into a farm-out agreement with the company Mercom Oil Sands Plc encompassing 50% of the Chard leases in Alberta, Canada. The remaining participating interest in the Chard leases will still be in NOPE’s ownership through our subsidiary Norwegian Oil Sands. Norwegian Oil Sands Corp. will be the operator. The parties have now finalized negotiations, signed and entered into all relevant agreements for the transaction and joint operations for the implementation of the project.
Mercom Oil Sands Plc is based in London and as of last week listed on the London Stock Exchange AIM under the ticker MMO. The company’s only asset is Chard.
(See link; http://www.bloomberg.com/quote/MMO:LN)
Both parties have fulfilled their obligations under the agreement after the schedule of payments was amended. Mercom Oil Sands has also obtained funding needed to comply with the other obligations in the agreement. The final settlement is expected to take place by the end of July or earlier before the transfer of the 50% stake in Chard to Mercom Oil Sands Plc.
Mercom Oil Sands has commissioned a study of the resource estimates for the Chard field. It is available on the following link from pg. 43 and onwards,.
DeGolyer & MacNaughton completed the independent assessment for Mercom Oil Sands that already classifies 21-60 million barrels of resources in Chard as contingent resources (economically recoverable). Potential economically recoverable oil based on proven resources is estimated at 70-127 million barrels.
Work program for the proving of resources and reserves
The work program for the proving of resources aims to verify and document the resources further. The program comprises 8 core wells, laboratory studies, analysis of the viscosity of the bitumen, third party evaluation of resources to be upgraded to contingent resources and reserves, suggested extraction methods and feasibility program for a pilot facility with commercial production.
Operational implementation of the project, as previously announced, is planned for Q3 2012. As soon as the results of the work program are available the parties will begin working on the planning of and application for a pilot facility for commercial production of bitumen.
Fredrikstad, Norway 4.6.2012
Nordic Petroleum AS
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