Science & Technology
Science and Technology
Science and Technology
Thu, April 9, 2009
Wed, April 8, 2009
MegaWest Energy Corp.: MegaWest Resolves Kentucky Commitments
CALGARY, ALBERTA--(Marketwire - April 8, 2009) - MegaWest Energy Corp. (the "Company" or "MegaWest") (OTCBB:MGWSF), an independent oil and gas company, specializing in non-conventional oil and gas projects with a focus on North American heavy oil, announced today that it has reached an Amending Agreement with its joint venture partner Kentucky Reserves II, LLC (KRII) to resolve its outstanding work commitment under the Kentucky Purchase Agreement.
Pursuant to the Kentucky Purchase Agreement, MegaWest was obligated to spend U.S. $15,000,000 by October 2009. In the event MegaWest did not complete this work program, the Company was obligated to pay 37.5 percent of the unspent balance to KRII. As of January 31, 2009, MegaWest had spent $4.8 million towards this commitment.
Pursuant to the Amending Agreement, the work program obligations and the attendant penalty payment provisions will be terminated. In return, MegaWest will reduce its working interest in the shallow rights from 62.5% to 37.5% and will transfer operatorship of the leases to KRII. Further, MegaWest will continue to pay, directly to the lessors of the lands which make up the Kentucky prospect, lease rentals for the 24-month period commencing March 1, 2009, which the Company estimates at $225,000.00.
MegaWest is appreciative of the support of KRII in reaching this agreement in these difficult financial times and will continue to work diligently to achieve the development of the significant resources associated with the Kentucky prospect.
MegaWest is continuing to execute its business plan to create shareholder value. MegaWest owns or has the right to earn an interest in over 146,000 acres in Missouri, Kansas, Kentucky, Montana and Texas. MegaWest seeks to prove up significant resources and achieve production from its heavy oil properties through the application of new technical developments in the commercial thermal recovery of heavy oil and it will continue to take every opportunity to ensure that the Company emerges from these trying times in a position to capitalize on the capability of its personnel and the quality of its heavy oil properties.
R. William Thornton, President & CEO
Forward-Looking Statements
This press release contains forward-looking information and statements including opinions, assumptions, estimates and expectations of future employee retention. Forward-looking statements include information that does not relate strictly to historical or current facts. When used in this document, the words "anticipate", "believe", "estimate", "expect", "forecast", "intent", "may", "project", "plan", "potential", "should" and similar expressions are intended to be among the statements that identify forward-looking statements. Forward-looking statements are not guarantees of future performance and are subject to a wide range of known and unknown risks and uncertainties, and although the Company believes that the expectations represented by such forward-looking statements are reasonable, there can be no assurance that such expectations will be realized. We have attempted to identify important factors that could cause actual results, performance or achievements to vary from those current expectations or estimates expressed or implied by the forward-looking information. The risks and uncertainties that could affect future events or the Company's future financial performance are more fully described in the Company's quarterly reports (on Form 6-K filed in the US and the financial statements and Form 51-102F1 filed in Canada), the Company's annual reports (on Form 20-F filed in the US and the financial statements and Form 51-102F1 filed in Canada) and the other recent filings in the US and Canada. These filings are available at [ www.sec.gov ] in the US and [ www.sedar.com ] in Canada. For all such forward-looking statements, we claim the safe harbour for forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.
Cusip: #585168 107
