Petro One Energy Corp. report that the first horizontal well drilled by its farmout partner (a senior oil company) on Petro One's 100% controlled J10 property has discovered oil and appears to be a successful producer, having averaged 147.7 bopd for its first 17 days ranging from 108.6 bopd to 194.9 bopd.

Under the terms of the farmout agreement, the farmee paid 100% of the drilling and completion costs, and Petro One has the right to convert its 10% Gross Overriding Royalty ("GORR) into a 30% working interest in the test well within 30 days of receiving notice of Payout. Based on the excellent oil volumes recorded thus far, this new well should substantially increase Petro One's cash flow and daily oil production, and add significantly to the Company's reserve base.

Petro One's partner now has 90 days from the rig release date to elect to drill a second well, to be spudded within 90 days after that election Third and subsequent wells may be elected by the farmee under the same terms as the second well. Petro One will have the option to convert its 10% GORR on the second and all subsequent wells into a 40% working interest. The property can accommodate up to 8 horizontal wells in the Frobisher, and 4 in the Midale. Based on the excellent results from the first well, the company looks forward to its farmout partner exploiting the full potential of the J10 property.

Tags: Petro One Energy Corp.