Donnybrook will participate as to a 25% working stake in a horizontal well (drill, complete and equip) and will retain a 25% working stake and a 10% GORR on a 75% working stake before payout.
The company will also retain a 50% working interest after payout in the well and in the balance of the seven section block at Prairie Creek.
The undisclosed farmee will earn a 50% after payout working stake (75% before payout) by paying 75% of the costs (drill, complete and equip), and by reimbursing 50% of the Prairie Creek land costs incurred to date.
The Prairie Creek lands will form part of certain non-core oil and gas assets to be spun-out to a new corporation, Donnycreek Energy.
The move comes following the proposed reorganization of Donnybrook’s business components into two separately listed public corporations by means of a plan of arrangement pursuant to the Business Corporations Act.
