Mako Hydrocarbons (ASX:MKE) has received reiteration of support from joint venture partners Transerv Energy (ASX:ASV) and Tamaska Oil & Gas (ASX:TMK) for the farm out of its Duvernay and Rock Creek assets in Western Alberta to Canadian Pan Ocean.
The Duvernay Shale is an emerging world class liquids rich resource play that is the source rock for most of the conventional oil fields in Alberta and has attracted the attention of companies such as ExxonMobil (NYSE: XOM), Sinopec Daylight, Encana Corporation (TSE: ECA), Talisman Energy (TSE: TLM) and ConocoPhillips (NYSE: COP).
Mako had previously said that the process had been delayed due to the complexity of the transaction but were expecting completion in the near future.
Mako's farm out its Duvernay acreage to Canadian Pan Ocean requires CPO to also acquire all of Transerv and Tamaska's interests in the resource play.
Transerv will receive about $14.2 million while Tamaska will get $3.6 million from the sale.
Transerv has a 34% interest in the Duvernay Shale acreage and 34% in the Rock Creek while Tamaska has 8% and 16% respectively.
Late last month, Transerv and Tamaska had advised that the terms of the transaction with CPO had been settled, however CPO had requested more time. An extension until July 8th, conditional on a 10% deposit, was granted.
Despite a deposit not being received by Transerv and Tamaska, both continue their backing for the deal but would look to market the assets to other buyers.
Mako joint venture and farm-in
CPO has the option to earn into Mako's lands with minimum commitments over the next three years of up to $220 million.
This could see it drilling up to 15 appraisal wells over the next three years. This includes 2 vertical and 2 horizontal wells in the first year.
Mako will reduce its holdings to 12.5% from 50% though it has an option to increase its working interest to 20%.
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