Primary Petroleum Corporation report that its wholly owned U.S subsidiary; Primary Petroleum Company LLC, has signed and closed a Sale and Joint Venture Agreement with a major U.S. based Industry Partner (JV Partner) that will pay $48.5 million to acquire a 32.5% working interest in Primary's 291,000 net acres in Western Montana.

The JV Partner has paid $7.5 million in cash and fully commit to fund a $41 million initial exploration program, consisting of shooting 3D seismic and drilling vertical and horizontal wells. Primary will retain operatorship during the 3D seismic and vertical drilling program and the JV Partner will become operator of the horizontal program. The initial exploration program is expected to be completed by the end of 2012. The JV Partner will retain an option for 60 days of completion of the initial program to commit a further $41 million on a similar secondary exploration program to acquire an additional 17.5% working interest. If the option is exercised, the JV Partner will retain operatorship. The effective date of the transaction is July 1st, 2011.

"Primary looks forward to working with a strong industry partner to delineate and prove up our acreage position in the Southern Alberta Bakken Basin in NW Montana," states Mike Marrandino, President & CEO. "The Basin continues to be de-risked by industry on both sides of the border and Primary is enthusiastic about the potential of confirming economic hydrocarbons over our lands. The next couple of years will be very exciting for the Company as we will be able to fulfill its business objectives and evaluate our acreage with the added technical expertise and financial backing of a strong joint venture partner."

Tags: Primary Petroleum