October 30, 2008
Aurora Oil & Gas Corporation Announces Farmout of New Albany Shale Acreage
TRAVERSE CITY, Mich., Oct. 30 /PRNewswire-FirstCall/ -- Aurora Oil & Gas Corporation today reported that it has recently "farmed out" its 64.43% interest in the Wabash Project to Atlas Energy Indiana, LLC ("Atlas"), a subsidiary of Atlas Energy Resources, LLC .
The Wabash Project is a 121,702 gross acre New Albany shale project located in the Indiana counties of Clay, Greene, Owen, and Sullivan. To date, Aurora has been the majority owner and has served as operator. Aurora has 13 wells drilled in the Wabash project area, all of which may be considered productive, though all are currently shut-in awaiting pipeline infrastructure and processing facilities.
A farmout is a common arrangement in the oil and gas business, defined as a contractual agreement with an owner ("farmor") who holds a working interest in an oil and gas lease. The owner may assign all or part of its interest to another party ("farmee") in exchange for fulfilling contractually specified obligations.
The terms of this farmout include the following farmee (Atlas) obligations:
1) Drill at least 20 horizontal wells on an annual basis. 2) Pay a well-site fee to Aurora for each well drilled. 3) Accept responsibility for any lease obligations, including payments for lease extensions. 4) Provide Aurora an overriding royalty interest ("ORRI") on the production. 5) Allow Aurora to participate as a working interest owner, if requested, in a 25% working interest in any leases pooled into a drilling unit. Successful Execution of Aurora Strategy
William W. Deneau, Chief Executive Officer, commented, "This agreement furthers Aurora's strategy of making all of Aurora's assets productive. Not only does this farmout create drilling activity on one of our inactive properties, but the existing wells may now be hooked up as a result of the infrastructure expected to be built throughout the project area. We are pleased to be partnering with Atlas, and we believe that their extensive expertise in shale plays will be a driving force in the future of the New Albany shale."
About Aurora Oil & Gas Corporation
Aurora Oil & Gas Corporation is an independent energy company focused on unconventional natural gas exploration, acquisition, development and production with its primary operations in the Antrim shale of Michigan and the New Albany shale of Indiana and Kentucky.
Cautionary Note on Forward-Looking Statements
Statements regarding future events, occurrences, circumstances, activities, performance, outcomes, beliefs and results, including production, reserves, revenues, cost control, asset transactions, negotiations for new credit arrangements, economic viability of development opportunities, and plans for future growth through drilling and production are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Although we believe that the forward-looking statements described are based on reasonable assumptions, we can give no assurance that they will prove accurate. Important factors that could cause our actual results to differ materially from those included in the forward-looking statements include the timing and extent of changes in commodity prices for oil and gas, drilling and operating risks, the availability of drilling rigs, changes in laws or government regulations, unforeseen engineering and mechanical or technological difficulties in drilling the wells, operating hazards, weather-related delays, the loss of existing credit facilities, availability of capital, and other risks more fully described in our filings with the Securities and Exchange Commission. All forward-looking statements contained in this release, including any forecasts and estimates, are based on management's outlook only as of the date of this release and we undertake no obligation to update or revise these forward-looking statements, whether as a result of subsequent developments or otherwise.
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Contact: Aurora Oil & Gas Corporation Jeffrey W. Deneau, Investor Relations (231) 941-0073 http://www.auroraogc.com/
Aurora Oil & Gas Corporation
CONTACT: Jeffrey W. Deneau, Investor Relations, Aurora Oil & GasCorporation, +1-231-941-0073
Web site: http://www.auroraogc.com/