CORRIDOR ANNOUNCES $100 MILLION ANTICOSTI JOINT VENTURE - THE GOVERNMENT OF QUEBEC AND MAUREL & PROM TO INVEST
HALIFAX, Nova Scotia: Corridor Resources Inc. announced today that it has signed a letter of intent with the Government of Québec, through its affiliates Investissement Québec and Ressources Québec ("RQ"), Pétrolia Inc. ("Pétrolia") (TSXV-PEA) and Etablissements Maurel & Prom S.A. ("M&P") to create a joint venture that will appraise and potentially develop hydrocarbon resources on Anticosti Island, Québec.
Exploration Program
The letter of intent calls for the parties to conduct an exploration program of up to $100 million in two phases, Phase 1 of which is to consist of an initial program budgeted at $55 million and not to exceed $60 million. The Phase 1 program is planned to commence in 2014 and requires the drilling of 15-18 stratigraphic wells in year one followed by three wells with multiple fracture stimulations in year two. Following a favourable decision of the board of directors of the General Partner of the limited partnership to be formed in its review of the Phase 1 results, a Phase 2 program for the remaining $40 to $45 million will be undertaken to drill and fracture stimulate an additional number of wells and conduct certain feasibility studies.
Funding by RQ and M&P
The commercial terms of the joint venture require Corridor and Pétrolia to transfer to a newly formed Québec limited partnership ("Partnership") their respective Anticosti exploration licenses containing 891,906 acres and 639,037 acres, respectively, in exchange for Partnership interests of 29.30% (Corridor) and 20.70% (Pétrolia). Concurrently, RQ and M&P will commit to spend $100 million collectively through the two phase program in exchange for a 50% interest in the Partnership; with RQ committing $56.67 million to receive a 28.33% interest and M&P committing $43.33 million to receive a 21.67% interest. Additionally, Corridor will transfer (i) a 6.67% interest in the Partnership to RQ in exchange for a cash payment of $13.33 million; and (ii) a 0.97% interest in the Partnership to Pétrolia in exchange for a cash payment of $1.93 million. The resulting interests in the Partnership will be as follows:
Ressources Québec 35% Corridor 21.67% Pétrolia 21.67% M&P 21.67%
M&P will have the right to exit from the Partnership after a minimum of $35 million has been expended by the Partnership in conducting a minimum of 15 stratigraphic wells and the drilling and fracture stimulation of one well. The exercise of M&P of this exit right would be based solely on a reasonable analysis and interpretation of the technical data and results of the Phase 1 program accomplished at that time. In such event, M&P would relinquish its entire interest in the Partnership for no consideration. If this were to occur, in completing Phase 1, RQ would fund up to $13.26 million of the remaining Phase 1 commitment and would then own 50% of the Partnership. Corridor and Pétrolia would each become obligated to pay up to $3.37 million and each would then own 25% of the Partnership.
