FORMCAP Corp. Announces Letter of Intent to Acquire Up to 1,500 Acres of Oil Leases in Cowley County, Kansas

FORMCAP Corp. announced a Letter of Intent (LOI) to acquire up to 1,500 acres of oil leases in Cowley County, Kansas. This LOI sets out FormCap's intention to complete a transaction between FormCap, Kerr Energy Group and Keta Oil and Gas, LLC.

The terms of the LOI are conditional upon the completion of a Definitive Agreement between FormCap, Kerr and Keta and, the approval of the Board of Directors of each company. Under the terms of the LOI, FormCap will purchase up to 1,500 acres of petroleum exploration and development leases from Kerr and Keta in Cowley County, Kansas. FormCap will own 100% of the Leases (80% net revenue to FormCap; 20% freehold royalty), and will be operator.

FormCap will have the option to purchase additional leases in Cowley County from Kerr and Keta under an Area of Mutual Interest (AMI), the terms of which will be set forth in the Definitive Agreement. FormCap is required to drill one well in each of the first two years of the Lease term to maintain its interest in the Leases. FormCap will also have the option to participate in the drilling of up to six exploration or development wells on lands currently owned by Keta and Kerr under terms to be set forth in the Definitive Agreement.