Loyz Energy Ltd. of Singapore and technical partner Rex Oil & Gas Ltd. have agreed to participate in the drilling of 80 wells in Colorado and North Dakota on acreage held by Fram Exploration, Trondheim, Norway.
Loyz and Rex Oil & Gas will provide two rigs and earn a 40% share of the net revenue interest in each producing well, convertible into a working interest. Splitting costs and interests evenly, they’ll supervise and execute drilling under a turnkey contract.
Fram will contribute $12 million of the cost of drilling the first 40 wells. Loyz and Rex will contribute the remainder, estimated at $28 million. For the other 40 wells, Fram will pay $28 million and Loyz and Rex the rest, estimated at $12 million.
Fram made an oil discovery in the previously gas-prone area in 2010 in its Mansur 33-1-K well.
In North Dakota, Fram holds leases centered on 10,863 acres in Renville County in the Williston basin. It believes shallow Mississippian Mission Canyon carbonate is prospective for oil in the area. It says an exploratory well it drilled in March 2011, Funke No. 1, cut 32 ft of net oil pay in the formation.