Falcon Oil & Gas Ltd. announces final approval of a multi-well drilling exploration program with Naftna Industrija Srbije Jsc ("NIS")
Tuesday, Jan 15, 2013Falcon Oil & Gas Ltd. (TSX VENTURE:FO), (Falcon or the "Company") the Toronto listed and Dublin headquartered company focused on unconventional oil and gas exploration and production in Hungary, Australia and South Africa, announces that further to its press release dated July 31, 2012, its Hungarian subsidiary TXM Oil and Gas Exploration LLC has executed the agreement in relation to a significant exploration program with NIS, a Serbian oil and gas company in which JSC Gazprom Neft has a 56% stake (the "Transaction").
The Algyo is a relatively shallow play between 2,300m and 3,500m. A number of Falcon wells have been drilled through the Algyo in recent years, some of which encountered gas shows, but to date no well has ever tested the play concept at an optimal location as previous wells targeted deeper intervals of up to 6,000m.
Multiple Algyo prospects have subsequently been identified by Falcon through extensive AVO analysis and the upcoming exploration drilling program with NIS will be targeting three separate high-graded prospects.
Under the terms of the Transaction, NIS shall drill three exploration wells targeting the "Algyo Play" within the Company's Mako Trough production licence in the Pannonian Basin, Hungary. NIS will earn, after undertaking the 3 well drilling obligation, 50% of the net production revenues from the 3 wells drilled. In addition, NIS will have an option to acquire a right of first negotiation for future drilling operations in the "Algyo Play", sharing any potential future costs and revenue 50:50 with Falcon. Falcon will still retain 100% interest in the "Deep Mako Trough".
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