MGM Energy Corp. (“MGM Energy”, the “Corporation” or “we”) began carrying on business as an independent company on January 12, 2007, and its common shares were listed on The Toronto Stock Exchange on January 16, 2007. MGM Energy was formed in order to acquire the Mackenzie Delta and Mackenzie Valley oil and gas interests of Paramount Resources Ltd. (“Paramount”) pursuant to a Plan of Arrangement under the ABCA. The Corporation was originally incorporated under the Business Corporations Act (Alberta) (“ABCA”) on October 31, 2006 under the name “1278517 Alberta Ltd.” The Corporation’s name was changed to MGM Energy Corp. on December 9, 2007.
Our principal business is to acquire, develop, optimize, exploit and ultimately produce oil and natural gas reserves in northern Canada.
Significant quantities of oil and natural gas have been discovered in the Mackenzie Delta and the central Mackenzie Valley regions of northern Canada since exploration by others began in these areas. To date, energy infrastructure, specifically in the form of pipelines to transport natural gas, has not yet reached regions north of the Cameron Hills area of the southern Northwest Territories. Pipelines to transport oil and other liquid hydrocarbons have not yet reached north of Norman Wells in the central Mackenzie Valley. Until a natural gas pipeline is built from the Mackenzie Valley to connect to the Alberta or British Columbia pipeline systems, there is no commercial method to move natural gas which we, or anyone else, may discover to markets. In addition, a liquids line is required north of Norman Wells to move liquid hydrocarbons discovered north of that area to markets. As a result, for at least the next five years, it is unlikely that we will generate any revenue from the production of hydrocarbons.
We believe that the current lack of transportation capacity from the central Mackenzie Valley and the Mackenzie Delta provides us with an opportunity to acquire interests in resources, including land and discovered hydrocarbons, that would not be available on reasonable terms, were a pipeline or other means of transportation of oil and natural gas available.
Our business strategy is to accumulate interests in hydrocarbon resources in the central Mackenzie Valley and Mackenzie Delta. These interests may include a combination of direct interests in land, interests in existing discoveries, and farm-ins on land currently owned or controlled by others. In the case of undrilled land which we believe to be prospective, we will drill for hydrocarbons and attempt to discover resources that could be developed to ship once a pipeline is built. In the case of the acquisition of previously discovered resources, we will develop those resources to ship through such a pipeline. Our business objective is to acquire oil and natural gas resources at a lower cost today than would be possible if a pipeline existed, and to thereby ultimately achieve returns for shareholders.