Hi Sandy9

1) Would exxon be allowed to buy us out if the szolnok tests go well,

Exxon, and for that matter MOL and any other company could buy Falcon out at any time and particularly if Szolnok tests go well. Exxon would need seek the approval of Falcon before going down that road. Any contractual impediment can be dealt with by ammending the contract by common agreement. But it is unlikely that Exxon would want go that way at this moment. There are several reasons for this, a couple of them include:

a) it sets a bad precedent to take over your junior JV partner so early in the stage and with no compelling reason,

b) Exxon would not want to concentrate its investment in this play unless Mako proved to be the cream of the cream in terms of gas plays (unlikely fact so far).

A compelling reason for Exxon and or MOL to want to take over Falcon would be if an outside entity made an attempt to take over Falcon now or upon successful Szolnok tests. It would depend on who that third party was and its ability to pay for the commitments, and what Szolnok is looking like from Exxon's and MOL's perspective.

If Falcon is put into play by a third party, so early in the game, Falcon would seek protection from Exxon and or MOL to bid higher than the third party. The inside knowledge on this play would allow Exxon and or MOL to make a bid that makes sense and win the day. Now if you follow this reasoning backwards, you will see that no third party in their right mind would want to bid for Falcon, when Exxon and MOL have so much knowledge that is not available to the public. Any third party would be overpaying (or made to overpay) dearly.

2) or is their a clause in the jv contract preventing them from doing so,

Sandy9, the contract is only an issue in an un-friendly take over. If friedly, and the BOD is onside, contracts can be ammended before the offer is made public.

3) until the reserves are built or exploitation phase if it occurs?

Now, here you are getting warmer. Once there is cash flow, Falcon becomes a target.

db