Comet Ridge’s US subsidiary, St Helens Energy LLC, holds a 40% interest in the joint venture, which has recently executed a lease option agreement (LOA) on 100,000 acres in the south-western part of Washington state.
Under the terms of the LOA, the joint venture has 60 days in which to select 100,000 acres from an overall 365,000-acre block in the Cedar Creek area in Lewis, Cowlitz and Skamania counties to conduct exploration activities. Initial cash consideration for this option is US$100,000.
The option period can be extended for 12 months by the joint venture committing to a work program with a minimum expenditure of about US$290,000. The two companies also have a 24-month first right of refusal on the balance of the 365,000-acre block.
The area is known to be underlain by thick coals and there have been strong gas shows in numerous coal exploration holes and previously drilled conventional oil and gas wells a short distance to the north-west of the block, according to Comet Ridge.
A major pipeline supplying gas to Portland, Oregon lies immediately to the west of the acreage position.
