CALGARY, Jan. 3 /CNW/ - Unitech Energy Resources Inc. ("Unitech") (TSXV: URX) is pleased to announce that it has entered into a Geological Consultancy Agreement with a private oil and gas company ("PrivateCo") pursuant to which Unitech agreed to generate a regional bypassed hydrocarbon study in consideration for the sum of $795,000. Unitech used its proprietary image analysis and pattern recognition system, called Leadscan, to generate the geological study on approximately 9,000 wells within Townships 1 and 8, Ranges 1 to 11, W2M (the "Area") and targeted the Bakken, Frobisher and Midale formations. The consideration payable to Unitech under the Geological Consultancy Agreement was satisfied by a cash payment of $95,000 and the granting by PrivateCo to Unitech of a gross overriding royalty ("GORR") and a working interest participation option ("WIPO") on approximately 6,000 acres of land in the Area. The terms of the WIPO as set out in the Farmout and Participation Agreement entered into with PrivateCo are such that Unitech can earn 9% of PrivateCo's working interest on any wells drilled on lands in the Area currently held by PrivateCo by electing to pay 15% of PrivateCo's share of the costs to drill any such wells. Unitech also entered into an Overriding Royalty Agreement with PrivateCo which provides for the payment to Unitech of a 3% GORR on PrivateCo's share of new production on the royalty lands in the Area. There is no current production subject to the GORR or the WIPO and Unitech will not be able to value the GORR and/or WIPO until such time as production is achieved. The term of the GORR and the WIPO expire on December 31, 2009, with Unitech retaining all interests earned under the Farmout and Participation Agreement.
About Unitech Energy Resources Inc.
Unitech uses its proprietary image analysis and pattern recognition system, called Leadscan, for a 'first look advantage' that drives Unitech's exploration strategy. Please visit Unitech's website at www.leadscan.ca. Shares of Unitech are listed for trading on the TSX Venture Exchange under the symbol URX.
Except for statements of historical fact, this news release contains certain "forward-looking information" within the meaning of applicable securities law. Forward-looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking statements, which include but are not limited to risks inherent in the oil and gas industry, regulatory and economic risks, and risks associated with the company's ability to implement its business plan. Unitech undertakes no obligation to update forward-looking information if circumstances or management's estimates or opinions should change except as required by law. The reader is cautioned not to place undue reliance on forward-looking statements.
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