Texas: Drift Lake Marion County farmout pending

Drift Lake Resources Inc., Toronto, said its US subsidiary, Northbrook Energy Inc., has entered into a farmout with an undisclosed arms-length party for its ownership interests in several leases located in Marion County, northeast Texas.

By OGJ editors
HOUSTON, May 10
-- Drift Lake Resources Inc., Toronto, said its US subsidiary, Northbrook Energy Inc., has entered into a farmout with an undisclosed arms-length party for its ownership interests in several leases located in Marion County, northeast Texas.

NEI will receive $400,000 cash on closing and retain a 15% working interest in the initial test well after payout and a 15% working interest in all future development wells. NEI will also receive an overriding royalty interest, ranging up to 2% depending on the lease, in all oil and gas produced. Geological details weren’t revealed.

The agreement is expected to close within 30 days. The transaction fits with the NEI business plan to farm out 100% of the economic risk of drilling and completing exploration wells while retaining the right to proportionately participate in the subsequent development.

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