Saturn Minerals Inc. (TSXV:SMI) amneded an existing letter agreement with Vector Exploration Corp. to a Farm-In Agreement for oil and gas permits EP-71 and EP-72 in Saskatchewan. Upon closing of a definitive Farm-In Agreement, Vector will complete a private placement in the Company of 4,00,000 shares at $0.10 per share for gross proceeds of $400,000.
As quoted in the press release:
Upon closing of a definitive Farm-In Agreement, Vector will have the opportunity to acquire up to an 80% interest in permits EP-71 and EP-72 by funding the acquisition of a minimum of 80 km of seismic data and the option to drill up to two wells. Following drilling of the two wells, Saturn will retain a 20% working interest in EP-71 and EP-72. The estimated exploration value of work in the Farm-In Agreement is $2.5 million. Both wells will be subject to a 1/350 (2.0–7.5%) royalty payable to Saturn until payout.
In addition, Saturn and Vector will define an Area of Mutual Interest for the northern Williston Basin wherein both companies will evaluate, acquire and develop additional oil & gas prospects on a 50-50 basis based on proprietary information and modeling jointly developed by Saturn and Vector.
Saturn Minerals Inc. President and CEO, Stan Szary, said:
This agreement is about creating value for Saturn shareholders. The cost of the additional seismic and drilling to be completed by Vector is nearly a quarter of the current market cap of Saturn, and the exploration value is potentially far higher. The Vector team has a track record of finding economic oil pools in the Williston Basin and the data we have jointly collected to-date on EP-71 and EP-72 has shown that this part of the basin has the potential to yield significant new discoveries of oil.