April 1, 2014: Vancouver, BC – Goldeneye Resources Corp. (TSXV: GOE) (the “Company” or “Goldeneye”) is pleased to announce that it has signed a farmout agreement (the “Agreement”) with Range Resources (NYSE: RRC, the “Farmee”) for the Company’s leasehold interests in section 23-5N-8ECM and section 7-5N-9ECM, Cimarron County, Oklahoma (the “Property”).
The Agreement provides that the Farmee will, on or before May 1, 2014, commence the drilling of a horizontal well for oil and/or gas on the Property to an approximate depth of 9,400 feet or a depth sufficient to test the Mississippian formation, whichever is lesser. After drilling has reached the targeted depth, the Farmee will either initiate completion of a well as a producer of oil and/or gas in commercial quantities (an “Earning Well”) or plug and abandon the well as a dry hole.
Upon completion of an Earning Well, the Farmee will be entitled to an assignment of the oil and gas leases held by the Company within section 23-5N-8ECM. The Company will retain a proportional overriding royalty interest on the net production produced from within these leased lands.
Under the Agreement, the Farmee also has the option to drill a second well, under the same terms and conditions as the first well, on section 7-5N-9ECM within 90 days of the date of the Agreement. If the Farmee does not drill a second well, the Agreement will terminate and the Farmee will have no further rights under it except those interests previously earned. The cost of each horizontal well is approximately US$6.0 million.
The Company retains three additional sections not included in the Farmout Agreement. John A. Reeves, Jr., CEO, stated, “We are very pleased to be working with such a reputable organization as Range Resources to develop two sections of our leasehold properties. We are also continuing our efforts to attract a JV partner to drill three additional vertical wells on our additional 100% held leases and are currently in discussions with a number of potential partners.”
ON BEHALF OF THE BOARD
John A. Reeves, Jr., CEO
We seek safe harbor.
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