Resource World Magazine

J U N E / J U L Y 2 0 1 7 www.resourceworld.com 63 Pennine Petroleum raises Albania exploration funds PENNINE PETROLEUM CORP. [PNN- TSXV] recently completed a $3 million, non-brokered, private placement to finance exploration and production in Albania. The placement comprises 50 mil- lion units at 6 cents/unit with one warrant exercisable at 10 cents. In mid-February 2017, Pennine signed a Production Sharing Agreement (PSA) with Albpetrol Sh.A for the exploration and development of the Velca Block in Albania. The finalized PSA contains a license agreement signed by Pennine, Albania's Ministry of Energy and Industry, and Albpetrol, the country's state-owned energy firm, for a six-year exploratory lease convertible into a 25-year production lease upon discovery of oil and/or natural gas. Upon signing the PSA, N. Desmond Smith, CEO of Pennine, said, "This is a very exciting day for Pennine. Albania has a long history of oil and gas development dating back nearly a century, and Pennine is excited to bring its expertise to this region." He added, "Albania has mature energy infrastructure, established legislation and regulations, and a recent history of significant foreign investment for the development of its energy sector." Pennine intends to initiate a Technical Report in the near future, and with exist- ing data, identify potential drilling targets within the Velca Block. The company is working with industry experts from Albpetrol and the Ministry in an advisory committee with Pennine acting as operator. "Our understanding and experience with Albania has enabled us to develop a partnership with the Albanian gov- ernment and Albpetrol through a new production sharing agreement. We believe this agreement provides a balanced risk- and-reward contract for the exploration and development of the Velca Block – and, we hope, many other opportunities in Albania," said Pennine Chairman Richard Wadsworth, who led Bankers Petroleum in re-developing the Patos Marinza oilfield as its president from 2004 through 2008. The PSA consists of an Exploration Phase and a Drilling Phase. Under the Exploration Phase, Pennine and Albpetrol will conduct an examination of all cur- rently existing geological, geophysical and well data on the Velca Block, and conduct any processing or re-processing of data to select drilling targets. The Drilling Phase will comprise a commitment to drill a min- imum of two wells to a minimum depth of 2,500 metres. Pennine will recover all exploration and development costs from 90% of the net operating revenue, after the state's 10% royalty tax, then subject to an R-factor revenue sharing with Albpetrol, ranging from 2%-15% of net operating revenue, depending on the multiple of cost recovery to the project. After payout of all costs, the interest in the revenue stream is shared, with 50% earmarked for the Albania Ministry of Energy and Industry and 50% for the participants of the PSA (a 100% working interest before payout and a 50% working interest after payout). In Canada, Pennine is the operator and has a 47% working interest in two heavy oil wells on the Chauvin Southeast prop- erty about 240 km southeast of Edmonton, Alberta. The company also holds 10 con- tiguous sections of petroleum and natural gas rights in the Youngstown area of east- central Alberta which host two producing natural gas wells and five shut-in natural gas wells. n OIL & GAS * Resource World does not sell your information to third parties #604-700 W Pender St., Vancouver BC V6C 1G8 Canada online at www.resourceworld.com or phone 1.877.484.3800 SAVE 50% up to Resource World (Print and Digital Edition) 1 Year ($19.95) Resource World (Digital Edition) 1 Year ($9.95) Resource World (Digital Edition) 2 Years ($14.95) Resource World (Print and Digital Edition) 2 Years ($24.95) International Resource World (Print) 1 Year ($89.00) Renew my subscription Canadian subscribers please add applicable sales tax

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