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Mcleod
In October 07, Magnum Energy Inc. entered into a farm-in agreement with a Calgary based private oil and company to participate in the drilling of an exploratory Cardium test well.
Under the terms of the agreement Magnum participated by way of a 45% working interest subject to the Farmor's election at the equipping point. The Farmor retained a one-time election to convert its royalty interest in the Farmout Lands to a 30% working interest. In such an event, Magnum's working interest would be converted to a 31.5% net working interest.
As announced, the well was successfully drilled and completed. The initial test results showed initial production rates in excess of 600 barrels a day of sweet light crude and approximately 200 Mcf/d of natural gas. The Farmor elected to convert at equipping resulting in Magnum retaining a 31.5% net working interest.
This will be the only well drilled at Mcleod as the operator has indicated that no other opportunities are available to drill.
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