Following a joint exploration agreement signed with Canbriam Energy Inc in November 200, and the drilling by the later of a first well in summer 2009 (Farnham No.1), Canbriam acquired a 60% interest in the shale section between the surface down to the top Trenton over a 8,000 ha block that overlaps permits 2009RS 298 and 2009RS296.
The remaining interest in this block between the surface and the top Trenton is now SQUATEX 28% and Petrolympic 12%. The deeper part of the block and the rest of the permits remains at SQUATEX 70% and Petrolympic 30%.
Just before the start of the initial drilling program Farnham, Canbriam agreed in June 2009 to accelerate its decision to exercise the first option of the agreement in paying an additional $ 3.5 million ($2.45 million to SQUATEX and $ 1.05 million to Petrolympic) before 30 November 2009 and drill, complete or abandon two additional vertical wells in the Utica Formation and reach 30 meters in Trenton Formation before December 31, 2011 to earn 60% interest in a second 8000 ha block.
Thus, according to the signed agreement, Canbriam still maintains its other options to earn a 60% interest in an additional 24,000 ha within the allowed 2009RS296 and 2009RS298 permits by drilling up to six additional wells (vertical / horizontal) and by paying a total amount of up to $ 13.5 million ($ 9.45 million to SQUATEX and $ 4.05 million to Petrolympic) before December 31, 2011. The contract period and dates were extended to take care of delays caused by the government strategic environment study.