PRIMARY PETROLEUM (PIE:TSX.V and PETEF: PK) is pleased to provide you with the following update on our
Williston Basin Saturn Prospect in Eastern Montana from our Joint Venture Partner.
The Saturn Prospect in Daniels County, Montana is located approximately 50 miles NW of the Elm Coulee Bakken Oil Field.
Saturn Project - Williston Basin - Eastern Montana
Nextraction Energy has completed permitting a 22 square mile area
for three dimensional (3-D) seismic work and plans to acquire the data in the
second quarter.
A well is planned to be drilled based on interpretation of the
seismic testing on the 35 section property.
The Companys expected expenditures
for the Saturn seismic program is $900,000 for the 22 square mile acquisition
(a 15 square mile program was previously estimated to cost $500,000-$650,000)
and estimated cost to drill, core and complete the 2,350 meter (7755 ft.) test well is
$1.2 million.
Nextraction Energy will look to develop the project as a multi-well
program based on appropriate test well data.
The properties are being
developed
under terms of a Seismic Option and Farm-out Agreement (see News Release
dated
December 17, 2010).
Under the terms of the agreement, Nextraction Energy
will operate
the project and fund 75% of the data collection costs for the seismic
program.
Prior to commencing the first core test well, Primary Petroleum will
have the option
to participate up to 25%.
Should Primary Petroleum
participate in the
drilling of the well, the before payout interest will be shared 75% by
Nextraction and 25% by Primary Petroleum, after payout interests will be
shared 52.5%
by Nextraction and 47.5% by Primary Petroleum.
If the Primary Petroleum
does not participate in
the well, Nextraction will own 100% before payout and 70% after
payout.Each vertical well will earn in two contiguous sections and each
hortizontal well will earn in 4 contiguous sections.
We hope you find this update informative.
Regards
PRIMARY PETROLEUM CORPORATION
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Primary Petroleum Corp
Suite 800, 744 4th Avenue SW
Calgary Alberta T2P 3T4
Canada
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