Wednesday, September 8, 2010

COVENANT RESOURCES SIGNS DEFINITIVE AGREEMENT FOR ACQUISITION OF 41,500 ACRES IN THE ALBERTA BASIN, MONTANA

Covenant signs definitive deal for Montana leases

2010-09-08 13:31 ET - News Release


Mr. Frank Port reports

COVENANT RESOURCES SIGNS DEFINITIVE AGREEMENT FOR ACQUISITION OF 41,500 ACRES IN THE ALBERTA BASIN, MONTANA

Covenant Resources Ltd. wishes to announce the signing of a Definitive Agreement with Damont Energy Inc. ("Damont") for the acquisition of oil and gas leases in Montana.

Pursuant to the Letter of Intent announced on August 11, 2010, the Definitive Agreement has been executed by the parties for Covenant to acquire Damont's right, title and interest in 41,500 net acres of oil and gas leases in "The SweetGrass Arch" Prospect located in Toole and Pondera Counties, Montana. The SweetGrass Arch (Alberta Basin) prospect has significant gas potential as well as Bakken oil potential.

The cost of the acquisition is $3,822,222 through the issuance of 19,111,110 shares of Covenant at a deemed price of $0.20 per share. A finder's fee of $228,000 is to be paid by Covenant via the issue of 1,140,000 shares of the Company to ABC Capital Holdings Ltd. for identifying this property. All the shares will be subject to a 3 year time release escrow, whereby 15% is to be released every 6 months. The effective date of the acquisition is August 01, 2010.

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