MGM Energy Corp. reported on October 4, 2012 its applications to the Sahtu Land and Water Board (the "Board") for a water license and land use permit required to allow it to drill a horizontal well on its Exploration License 466 in the Central Mackenzie Valley were referred to an environmental assessment. Shell Canada Energy has exercised its option under the Farmout Agreement with MGM Energy to not fund the environmental assessment process and, pursuant to the Farmout Agreement, it no longer has the option to drill a second well.

MGM Energy also announced that it will not be proceeding on its own with the environmental assessment process requested by the Board in respect of the second, horizontal well. MGM Energy has advised the appropriate regulatory agencies in the Northwest Territories that its applications have been withdrawn. This action has no impact on MGM Energy's permits already issued in respect of a vertical well to be drilled this upcoming winter on the same lands.

Tags: MGM Energy