High North Resources Ltd.
TSX VENTURE : HN

High North Resources Ltd.

July 03, 2014 08:30 ET

High North Resources-Operational Update

CALGARY, ALBERTA--(Marketwired - July 3, 2014) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.

High North Resources Ltd. (TSX VENTURE:HN) (the "Company" or "High North") is pleased to provide an operational update.

DRILLING UPDATE

The Company is encouraged by the recovery of hydrocarbons upon completing and testing the two new wells drilled at 8-21-76-21W5M and 8-02-76-21W5M and is moving to install production equipment at both locations.

AMENDMENT TO FARMOUT AGREEMENT

The Company previously announced on March 24, 2014 that it had entered into an amending agreement on March 21, 2014 (the "Agreement") with certain farmors (the "Farmors") which reduced the rate of the overriding royalty (the "Overriding Royalty") payable under three farmout agreements between the Company and the Farmors (the "Farmout Agreements"). The Agreement encompasses the Company's McLean Creek Block "A" Area, the McLean Creek Block "B" Area, the McLean Creek Block "C" Area, the Sturgeon Lake/Snipe Lake Block "D" Area and Block "H" and "I" (the "Farmout Lands"). The Farmout Agreements cover approximately 100 sections of land. Under the terms of the Agreement, the Farmors agreed to reduce the Overriding Royalty on the Farmout Lands from eight percent to five percent. The consideration paid for the reduction in the Overriding Royalty was $5,000,000, of which $1,000,000 was paid by the Company to the Farmors on April 15, 2014, and the balance of $4,000,000 which was to be paid on June 30, 2014.

The Company is pleased to advise it has entered into an amending agreement with the Farmors as of June 30, 2014 (the "Amending Agreement"), whereby the obligation to pay the further sum of $4,000,000 has been extended by way of a loan, bearing an interest rate of prime plus one percent until October 31, 2014 (the "Loan"). In addition, the Amending Agreement also provides the Company with the opportunity to suspend the payment of certain delay payments relative to specific drilling obligations from July 1, 2014 to October 31, 2014 (the "Delay Payments").

The Loan and the suspension of the Delay Payments free up considerable short term cash for the Company. Colin Soares, the Company's President and Chief Executive Officer stated: "High North is extremely pleased with the settlement and deferral of these payments. This provides additional and immediate funds which will assist in the continuation of the Company's Montney oil development drilling program at our Girouxville-McLean property".

Reader Advisory Regarding Forward-Looking Statements

This news release contains certain "forward-looking statements" or "forward-looking information" (collectively referred to herein as "forward-looking statements") within the meaning of applicable securities legislation. Such forward-looking statements include, without limitation, forecasts, estimates, expectations and objectives for future operations that are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur or be achieved. This news release contains forward-looking statements, pertaining to, among other things, the following: the recovery of hydrocarbons, the installation of production equipment, future royalty payments and anticipated changes to the Delay Payments and the Company's future drilling obligations. Statements regarding future production, capital expenditures and development plans are subject to all of the risks and uncertainties normally incident to the exploration for and development and production of oil and gas that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. These risks include, but are not limited to, inflation or lack of availability of goods and services, environmental risks, drilling risks, regulatory changes and certain other known and unknown risks detailed from time to time in High North's public disclosure documents, copies of which are available on High North's SEDAR profile at www.sedar.com.

Although High North believes that the material factors, expectations and assumptions expressed in such forward-looking statements are reasonable based on information available to it on the date such statements were made, no assurances can be given as to future results, levels of activity and achievements and such statements are not guarantees of future performance. High North's actual results may differ materially from those expressed or implied in forward-looking statements and readers should not place undue importance or reliance on the forward-looking statements. Statements including forward-looking statements are made as of the date they are given and except as required by applicable securities laws, High North disclaims any intention or obligation to publically update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this news release are expressly qualified by this cautionary statement.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information