TORONTO, Jan. 14, 2013 /CNW/ - Sprott Resource Corp. ("SRC" or "The Company") (TSX: SCP) is pleased to announce that its subsidiary One Earth Oil & Gas Inc. ("One Earth Oil & Gas") has entered into a joint venture agreement with Gift Energy Limited ("Gift Energy"), an entity established by the Gift Lake Metis Settlement ("Gift Lake"), to explore and develop Gift Lake lands for heavy oil.
"We are honoured to be moving forward on this project with our partners at Gift Energy and the people of Gift Lake," said Blaine Favel, CEO of One Earth Oil & Gas.
Gift Lake is located in the Peace River region of Northwest Alberta, an area of existing heavy oil production. The Gift Lake lands are situated southeast of major Bluesky oilsands production fields in the Seal and Cliffdale regions currently operated by several established Canadian energy producers.
An Oilsands Lease for 12 sections (3,072 hectares) of land has now been finalized with the Alberta government. As a precursor to further development activity, One Earth Oil & Gas and Gift Energy will undertake an initial 3D seismic and drilling program in the first half of 2013, representing a total investment in the joint venture of up to $15 million by One Earth Oil and Gas. The Gift Bluesky heavy oil project is anticipated to produce under cold flow primary technologies. An option on a further 12 sections is also available to the parties, subject to standard lease and permitting requirements.
"We expect the partnership model that One Earth Oil & Gas and Gift Energy will use to develop this project to be mutually beneficial to both investors and the community of Gift Lake," added Dave Lamouche, Chairman of Gift Lake.
One Earth Oil & Gas was established by SRC in 2009 as a vehicle to realize the potential for economic oil and gas development through partnerships between industry and Canada's Metis and First Nations.
"Through this project, we are pleased to bring a partner like Gift Lake together with the One Earth Oil & Gas management team, which has deep experience in both Western Canadian heavy oil exploration and building businesses with Aboriginal communities," commented Kevin Bambrough, CEO of SRC.