Epsilon Energy Ltd. announced definitive agreements to form two joint ventures in the Western Canadian Sedimentary Basin of Alberta, Canada. The first partnership, with a Calgary-based private operator, grants Epsilon a 25% working interest in approximately 30,000 gross acres in the Garrington area and 130,000 gross acres in the Harmattan area. These lands are primarily held by production and target liquids-focused Glauconitic, Ellerslie, and Upper Viking formations.
The consideration for this joint venture involves an up to $12 million CAD development carry, to be deployed over a minimum of four gross horizontal wells with 1.5-mile laterals within 12 months from December 1, 2024. The operator retains an option for two additional gross horizontal wells over the subsequent 12-month period. Epsilon estimates the Garrington area alone holds over 25 two-mile Mannville locations.
Additionally, Epsilon entered a separate joint venture in the Killam area of Alberta in April 2024, acquiring a 50% working interest in 14,000 gross acres for $1.4 million CAD. This project targets the liquids-focused Mannville formation, with Epsilon committing to participate in two wells during 2024. The initial two wells drilled in August and September 2024 resulted in one commercial discovery, while the second prospect faced mechanical issues preventing proper evaluation.
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