US oil and gas exploration and development company FormCap has signed a letter of intent (LOI) to purchase around 1,500 acres of petroleum exploration and development leases from Kerr Energy and Keta Oil and Gas in Cowley County, Kansas.
Upon completion of the transaction, FormCap will own and operate 100% of the leases, and will have the option to buy additional leases in Cowley County from Kerr and Keta under an area of mutual interest agreement.
To maintain its interest in the oil leases, FormCap has to drill one well in each of the first two years of the lease term.
The company will also have an option to drill up to six wells on lands owned by Keta and Kerr.
The Cowley Country area has many zones with high potential for producing oil, including Mississippian, Layton, Lansing-Kansas City, Bartlesville, Stalnaker and the Arbuckle.
FormCap CEO Graham Douglas said: "FormCap is excited about the potential of its relationship with Kerr and Keta in Cowley County, Kansas, as there are tremendous opportunities to produce commercial light oil and gas in an environment of high crude oil prices and low finding and developing costs."
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By GlobalDataFormCap is actively engaged in developing oil and gas energy resource properties at Cowley County and the Mississippi prospect in Kansas.
The LOI is subject to completion of definitive agreement between the firms and approval from their board of directors.
