Gastem: Partner Completes 60% Earn-In and Initiates Frac Program on Yamaskaadmin
Gastem announced that following the summer 2008 program, including the drilling of two horizontal wells at St-Francois and St-Louis, Canadian Forest Oil (Forest) has fulfilled its spending requirement and earned a 60% interest in the Yamaska Property. As per the agreement, Forest is now the operator of the Utica Shale Program on Yamaska, covering some 112,000 acres.
On the Yamaska Property, the partners are on schedule with the previously announced plan to fracture stimulate both wells. Results of the program are expected to be available by year end 2008. “Assuming favourable test results,” Forest states that “it expects to commence a pilot horizontal program in the St. Lawrence Lowlands in 2009 with full scale development to begin in 2010.”
Gastem has notified Questerre Energy that it is exercising its option to convert Questerre’s 7.5% GORR on Yamaska to a 20% working interest, according to the terms of a separate Farm-In agreement between Gastem and Questerre. At present, the partner’s working interest positions and share of the costs on the Yamaska permit are Forest Oil 60%, Gastem 20% and Questerre 20%. Epsilon has yet to elect to participate in future Yamaska wells for a 5% interest, and Gastem’s interest would then be 15%.
Given current spending plans for the remainder of 2008 on Yamaska, Gastem expects its share of the exploration costs to be approximately $ 1 Million. Gastem currently has cash on hand of approximately $13.5 Million.
Gastem is an independent gas exploration company based in Montreal. The company holds exploration and storage rights to 3,135 km2 of land in the St. Lawrence Lowlands, the Gaspe Peninsula and the Magdalen Islands in Quebec as well as rights and interests in New York and West Virginia.