SASKATOON, SASKATCHEWAN--(Marketwire - July 25, 2012) - WESTCORE ENERGY LTD. (TSX VENTURE:WTR) ("Westcore" or the "Company") is pleased to announce that it has entered into a binding farm-in agreement (the "Farm-In Agreement") dated July 24, 2012 with Allstar Energy Limited ("Allstar"), a private Saskatchewan-based oil and gas exploration and production company, whereby Westcore will farm into Allstar's Riverside Lands located 16 km north of the town of Leader in Western Saskatchewan. The Farm-In Agreement is subject to review and acceptance by the TSX Venture Exchange.
Under the terms of the Farm-In Agreement, Westcore will complete a 3D seismic survey on the Riverside Lands pursuant to which it will expend up to a maximum amount of $1,000,000. Based on the information obtained from the seismic program, a drilling program will be planned for the Riverside Lands. In exchange for its completion of the seismic program, Westcore will earn a 60% working interest in certain wells drilled on the Riverside Lands under that program. In addition, Westcore has been granted an ongoing right of first refusal to participate in additional wells on the Riverside Lands, whereby Westcore will fund 100% of drilling operations (to a maximum amount of $1 million) for a further 60% working interest in such wells.
Westcore expects that funding for its initial obligations under the Farm-In Agreement (being $1,000,000) will be derived from existing sources of cash on hand, which will fully satisfy Westcore's contribution to the Farm-In Agreement.
Allstar is a wholly-owned subsidiary of 49 North Resources Inc. ("49 North"). As 49 North is also an Insider of Westcore by virtue of its shareholdings (roughly 23% of outstanding Westcore shares), Allstar and Westcore are considered to be "Non-Arm's Length Parties" under the rules and policies of the TSX Venture Exchange. Notwithstanding the foregoing, the proposed transaction is expected to be exempt from valuation and minority shareholder approval requirements under applicable securities laws.
Allstar has recently completed the second of two re-entry wells on the Riverside Lands, which are located approximately 20 kilometres south of the Mantario oil field, which has been producing heavy oil since the early 1990s, with cumulative production in excess of 47 million barrels of oil (see 49 North's press release dated July 20, 2012 for further details).
Paul Conroy, President and Chief Executive Officer states "The chance to participate in Allstar's seismic and drilling programs represents an excellent opportunity for Westcore to expand and diversify in its objective of providing energy solutions for North America. The proposed program is an ideal complement to our existing and ongoing activities with our principal coal properties and represents an exceptional occasion to diversify our portfolio of assets, which we hope will also provide a stable stream of cashflows over the short term and into the foreseeable future. We look forward to exploring with Allstar and building on their past success."
Except for statements of historical fact, this news release contains certain "forward-looking information" within the meaning of applicable securities law. Forward-looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. In particular, forward-looking information in this press release includes, but is not limited to, the use of the net proceeds of the offering. Although we believe that the expectations reflected in the forward-looking information are reasonable, there can be no assurance that such expectations will prove to be correct. We cannot guarantee future results, performance or achievements. Consequently, there is no representation that the actual results achieved will be the same, in whole or in part, as those set out in the forward-looking information.
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