SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report Pursuant to Section 13 or 15(d) of
the Securities Act of 1934
Date of Report (date of earliest event reported): November 20, 2000
AMG OIL LTD.
(Exact name of registrant as specified in its charter)
Nevada 000-30087 N/A
(State or other (Commission (I.R.S. Employer
jurisdiction File Number) Identification No.)
of incorporation)
Suite 700, 700 - 6th Avenue, SW
Calgary, AB, T2P-0T8
(Address of Principal Executive
Offices, including Zip Code)
(403) 531-9718
(Registrant's Telephone Number,
including Area Code)
(Former name or former address, if changed since last report)
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Item 5. Other Events.
On November 20, 2000 AMG Oil Ltd.'s (the "Company") board of directors ratified
a letter agreement earlier entered into with Durum Cons. Energy Corp. "Durum".
Pursuant to the agreement the Company shall grant Durum a twenty percent (20%)
beneficial interest in the North Area of PEP 38256, which includes the site of
the Arcadia-1 well, with effect from the date on which the Arcadia-1 well
spudded ("Effective Date"); The material terms of the agreement provide:
1. In consideration of the grant of the beneficial interest Durum shall
contribute:
(1) forty percent (40%) of the costs incurred under the PEP 38256 Joint
Venture Operating Agreement, dated 5 October 2000 ("JVOA"), on the
drilling and the plugging and abandoning or the setting of casing to
total depth ("Drilling and Casing") of the Arcadia-1 well.
(2) thereafter, contribute twenty percent (20%) of the cost of joint
operations on the Arcadia-1 well, if any;
(3) 20% of the past costs incurred in the North Area being NZ$160,000.
(4) 20% of ongoing costs for the North Area per the JVOA.
2. From the Effective Date, Durum shall be entitled to a twenty percent (20%)
vote on all decisions relating to joint operations under the JVOA in which
it is participating;
3. Durum shall be responsible only for obligations and liabilities attaching
to the interest under the JVOA which accrue as and from the Effective Date;
and
After completing this farm in the Registrant had sufficient funding in place to
fund the second well ( the Arcadia-1 well) in its two well obligation pursuant
to the terms an option agreement granted to Registrant by the operator of
permit, Indo-Pacific Energy Ltd. Under the terms of the agreement the Registrant
agreed to fund the drilling of two wells in order to earn an 80% interest in the
permit.
The Arcadia-1 well was spudded on November 12, 2000. The well reached its target
depth of 4852 feet on November 23, 2000. While reservoir quality sandstones were
encountered , no effective top seal to these was present, and there was no
evidence for commercial hydrocarbons and the well is to be plugged and
abandoned.
After giving effect to this transaction, the interests in PEP 38256 are the
following:
Company North Area PEP 38256 South Area PEP 38256
AMG Oil Ltd. 50% 58%
Indo-Pacific Energy Ltd. 20% 20%
Magellan Petroleum
Australia Limited 12%
Durum Cons. Energy Corp. 20%
Orion Exploration Ltd. 10% 10%
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Durum is a Canadian based junior exploration company. Two of the Registrant's
directors, Dr. David Bennett and Mr. Michael Hart are also directors of Durum,
but neither own any common shares in Durum. Mr. Alex Guidi, a former director of
the Registrant, and a major shareholder in the Registrant, owns 200,000 common
shares of Durum.
Item 7(c). Exhibits.
List of Exhibits
Exhibit No. Exhibit Description Page No
99.1 Letter Agreement amongst AMG Oil Ltd. and Durum Cons. Energy
Ltd. signed on November 20, 2000;
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Exhibit 99.1
EP 38265 Farmin Page 1
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10 November 2000
Dr. David Bennett
Chief Executive Officer
AMG Oil (NZ) Limited
284 Karen Road, Karori
WELLINGTON, New Zealand
Dear Dr. Bennett
PEP 38256 - Arcadia-1 Well
--------------------------
Further to the various discussions during recent weeks regarding the drilling of
the Ealing-1 and the Arcadia-1 wells in PEP 38256 in the onshore Canterbury
Basin of New Zealand, Durum Cons Energy Corp advises that, subject to Board
approval, it is prepared to farmin to PEP 38256, through a wholly owned New
Zealand subsidiary ("Durum"), on the following terms:
1. AMG Oil (NZ) Limited ("AMG") shall grant Durum a twenty percent (20%)
beneficial interest in the North Area of PEP 38256 (as shown on the
attached map) with effect from the date on which the Arcadia-1 well spuds
("Effective Date");
2. In consideration of the grant of the beneficial interest referred to in
paragraph 1, Durum shall contribute:
(i) forty percent (40%) of the costs incurred under the PEP 38256 Joint
Venture Operating Agreement, dated 5 October 2000 ("JVOA"), on the
drilling and the plugging and abandoning or the setting of casing to
total depth ("Drilling and Casing") of the Arcadia-1 well;
(ii) thereafter, contribute twenty percent (20%) of the cost of joint
operations on the Arcadia-1 well, if any;
(iii) 20% of the past costs incurred in the North Area being NZ$160,000.
(iv) 20% of ongoing costs for the North Area per the JVOA.
3. From the Effective Date, Durum shall be entitled to a twenty percent (20%)
vote on all decisions relating to joint operations under the JVOA in which
it is participating;
4. Durum shall be responsible only for obligations and liabilities attaching to
the interest under the JVOA which accrue as and from the Effective Date; and
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EP 38265 Farmin Page 2
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Please confirm your acceptance of the above farmin terms and conditions by
signing, dating and returning the duplicate copy of this letter.
Yours sincerely, Signed for and on behalf of
AMG Oil (NZ) Limited
/s/ Bernhard Zinkhofer /s/ David Bennett
Bernhard Zinkhofer David Bennett
President Durum Cons Energy Corp. Chief Executive Officer
Dated: November 20, 2000
--------------------
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AMG OIL LTD.
Date: December 4, 2000 By: /s/Cameron Fink
--------------------------------------------
Cameron Fink
President
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