Novus Energy has entered into a farm-in agreement with a private oil and gas company to earn certain key lands within its Dodsland Saskatchewan core operational area.

The agreement will provide Novus with rights to farm-in on an estimated 10,400 acres or approximately 16.25 sections of lands with petroleum and natural gas rights in the Viking formation. With this agreement, and pending the successful closing of the proposed acquisitions previously announced on April 27, 2010, Novus will control nearly 70 net sections of land in the Dodsland area.

Under the terms of the farm-in agreement, which has an earning term of four years, Novus will pay 100% of all of the farmor's drilling costs to earn all of the farmor's working interest, while the farmor will maintain an industry standard royalty interest in any production.

Novus has agreed to drill 13 development wells prior to April 30, 2011.

The agreement provides for a rolling option to earn the remainder of the farm-in lands.

In addition to the farm-in, Novus has recently purchased a key section of land in close proximity to the farm-in acreage for a cash purchase price of $300,000.

Novus expects to commence drilling on the farm-in lands in the next sixty days, which will allow the Company to expedite the earning process.

Hugh Ross, President & CEO of Novus commented, "Dodsland has become the Company's core asset, these new lands significantly enhance our presence in the Dodsland area and provide an excellent fit with the Company's overall strategy of delivering sustainable growth focused on long-term oil reserves. Based on the size of the Company's land position in the area, Novus anticipates unrestricted drilling opportunities for the next five years."

Tags: Novus Energy