- Precious metals exploration firm Argo Gold (ARQ) announced its intention to get into the oil and gas sector
- The Toronto-based company said it plans to sign two letters of intent to earn into oil and gas exploration and development of mineral lands
- The company is entering the gas and oil sector “as a result of an increase in oil and gas prices, world energy supply issues”
- The company can earn a 100-percent working interest on two land parcels in Alberta, subject to a gross overriding royalty
- Argo Gold is up 7.14 percent, trading at $0.075 at 12:13 pm ET
Precious metals exploration firm Argo Gold (ARQ) said Monday it intends to get into the oil and gas sector.
The Toronto-based company said it plans to sign two letters of intent to earn into oil and gas exploration and development mineral lands.
The company said in a news release, it is taking the steps “as a result of an increase in oil and gas prices, world energy supply issues, and the abundance of oil and gas exploration and development opportunities in Canada.”
The mineral lands are located on two separate oil prospects in southern Alberta.
The company can earn a 100-percent working interest on the land parcels, subject to a gross overriding royalty to the holder of the mineral lands, in exchange for drilling one test well per prospect.
The oil prospects are seismically defined and located within in a well-known producing trend with proven oil zones.
Four additional well locations have been identified on the two prospects.
A yield on the two initial test wells is estimated to be 100 to 150 barrels per day.
The estimated ultimate recovery of the two initial wells is expected to be between 275,000 and 300,000 barrels per day.
Argo Gold is up 7.14 percent, trading at $0.075 at 12:13 pm ET.