FORMCAP CORP (PINKSHEETS:FRMC) announced today that it has completed its Due Diligence of the Frio Draw Prospect located in Curry County, New Mexico. FormCap’s management team and consultants completed a thorough review of all legal, technical and geological information available on the Frio Draw Prospect. All of the mineral leases, which make up the prospect, have been properly recorded and the lease bonus payments, all of which are for a five year term, have been verified. A drill site visit was conducted, meetings were held with the Driller, Landsat Data Consultant and the Geologist responsible for generating the prospect. “We are very pleased with level of detailed geological interpretation and well control that was available on this prospect. Core and log data from Stratagraphic wells completed by Shell in the late 1960’s indicate good structure and porosity, which we found to be very compelling,” stated FormCap President Graham Douglas.
Based on these conclusions, FormCap today advanced funds to begin the permitting process for the Nitz#1, the initial drill hole in the Frio Draw Prospect. The Company anticipates that all permitting and pre-drilling activity will be completed to accommodate a spud date sometime in October.
Under the terms of the Option Agreement, FormCap can acquire up to 50% Working Interest (40.75% Net Revenue Interest) in the 13,252 acre Frio Draw Prospect by drilling two wells; 25% Working Interest from drilling the first well and an additional 25% Working Interest from drilling the second well. Thereafter, FormCap and Morgan Creek will fund additional drilling on a heads-up basis. A total of 180 wells potentially can be drilled on the Frio Draw Prospect acreage.