Oil sands properties developer Mercom Oil Sands plans to join Aim on 29 May.
Mercom (www.mercomoil.com) has a farm-in agreement with Nordic Petroleum to earn up to 50% of four oil sands leases in the Chard filed in Alberta, Canada. The plan is to drill eight wells over two years. Mercom has to pay 100% of exploration work valued at C$2.5m. In addition, Mercom will pay C$700,000 for the transfer of 50% of the licence rights.
According to Nordic (www.nop.as), Chard has the potential to produce 4,000 barrels of oil per day. There are potential recoverable reserves estimated to be between 29m and 176m barrels of oil. There are already fields producing in the area so the infrastructure is already in place.
The plan is to use steam injection in order to extract the oil. Operating costs of extraction are expected to be around $15-$17/barrel.
Mercom will seek other opportunities in the region.
Non-executive chairman Dr Patrick Cross holds the same position at AIM-quoted Empyrean Energy. He spent 25 years with BP.
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