Excerpts from the hearings

PORTRUSH PETROLEUM CORPORATION
APPLICANT
- and -
DAVID O’NEILL ENTERPRISES LIMITED
(formerly 1062011 Ontario Limited)

Background
Portrush Petroleum Corporation, the Applicant, is incorporated under the laws of the Province of British Columbia. Its head office is located at 700 - 595 Howe Street, Vancouver, British Columbia, V6C 2T5.
The Applicant has received directions from the Ministry of Natural Resources., in relation to a request for a drilling license. All lands (being 150 acres) identified within the specific Moore 5-13-III, Spacing Unit (2005-8) must be under lease before a request for a license is considered pursuant to O.Reg. 245/97, amended by O.Reg. 75/04; at subsection 8(3) [1].

The Applicant, Portrush Petroleum Corporation, currently has executed Petroleum, Natural Gas Lease(s) and Grant(s) with three of the four landowners within the designated spacing unit. The efforts to acquire the final fourth lease voluntarily were met with resistance from the landowner. This ordered Petroleum and Natural Gas Lease and Grant for the final 67.6160 acres from landowner, David O’Neill Enterprises Limited, will complete the spacing unit and allow the Applicant to proceed with the application for a well license to drill for oil or gas.

The Applicant made an Application for a Pooling Order under the Oil, Gas and Salt Resources Act, R.S.O. 1990, c. P. 12, as amended pursuant to clause 8(1)(a) therein.

The Waubuno Pool, Mr. Hadley noted, produced 6.01 bcf of natural gas before going into storage and it is expected that this pool prospect is similar, at approximately 5.0 bcf of natural gas. At today’s prices that could translate to twenty-five million dollars in revenue. Production for this prospect is estimated to be 3 million cubic feet of natural gas per day.

Mr. Hadley stated that Portrush Petroleum Corporation (Vancouver), incorporated in 2000, which trades on both the Vancouver and Toronto stock exchange(s), will be the operator of this drilling prospect. He noted that the President of the company, Mr. Martin Cotter, is a petroleum engineer with Alberta exploration experience. Mr. Hadley explained that he is a shareholder of the company and the contracted consultant on this prospect. He noted that his experience with the company dates to 2000 when he located a pinnacle reef prospect near Detroit which now produces oil under the operator Direct Energy. He added that, the company also has interests near Corpus Christie, Texas. He explained that the company (December 31st, 2005 statement) has a net equity of $1,718,248 on assets of $1,843,436.

"The Tribunal finds that it is not the purpose of the Oil, Gas and Salt Resources Act to allow a sole landowner to hold other landowners and an oil and gas producer in a spacing unit hostage by withholding their agreement to enter into a lease for the oil and gas interests. A fully pooled spacing unit is not only a benefit to the pooled spacing unit landowners and the producer; it offers benefit by way of royalties to the Province and directly creates jobs as well as jobs in spin-off industries and support."
The tribunal finds the hydrocarbon substance is owned by its captor and in this case is expected to be Portrush Petroleum Corporation. The rule of capture is recognized in Ontario and in reading Ballem [9], an authority on the subject, at page 92 he explains.