Mitchell Ranch Project
Lynden Energy Corp. has entered into a Participation Agreement to acquire a 50% interest in an option to acquire oil and gas leases covering 101,495 gross and net acres in Coke, Mitchell, and Sterling counties of West Texas.All acreage is contained within a historical ranch. The ranch lies to the immediate west of the Jameson oil field and is approximately 10 miles south-east of the Iatan oil field. The project will be focused on Permo-Pennsylvanian-aged detrital targets along the eastern shelf of the Permian Basin where there are numerous opportunities across several pay zones, all of which are shallower than 8,000 feet in drilling depth. Management believes the opportunity to acquire an interest in such a large and contiguous land package in the Permian Basin is unique.
Pursuant to the Participation Agreement, Lynden will acquire an undivided 50% interest in the option to acquire a 100% working interest in the 101,495 acres, subject to a 22.5% royalty to the mineral rights owners. Lynden can earn its interest in the option by paying 100% of the costs to drill and complete the first two wells (up to US$2,400,000) and by making additional payments to CrownRock totaling approximately US$3,000,000. The option can be converted into a lease(s) through additional payments to the mineral rights owners. The option has an initial term of 18 months with provisions to extend the option an additional 18 months.