>This is a 2008 review and the closes they come to mention un-conventional gas resources is this statement (which appears to be global) "Unconventional resources are considered to represent a potential ranging from about 13 500 to 25 000 Tcm."

Not quite, there was a little more than that, but it wasn't specific to Hungary. Then again, neither was the report :)

"These figures do not include the long-term potential offered by unconventional oil and gas (see chapter 3)."

"These conventional natural gas resources could be augmented by unconventional resources.
The unconventional resource potential is not negligible. This potential will however be more difficult to exploit, in view of enhanced recovery techniques needed and the increasing share of sour gas to be encountered, posing safety issues."


Falcon also got a good mention in both the 2005 and 2006 annual reports to the European Commission, as well as in the Economist Intelligence Unit 2008
report. Now that we have Exxon and MOL's involment, I'm really looking forward to next years report.
There was no mention of the Mako Trough in the Hungarian Energy Office's 2007 annual report, but that's understandable, since the events they mentioned in the 2006 one only got off the ground yesterday :)



ANNUAL REPORT 2005
to the European Commission

Hungarian Energy Office

Budapest, July 2006

5.2 Gas

Current level of total gas consumption: 14.742 BCM
Expectations for the next three years:
- 2006: 15.0 BCM
- 2007: 15.5 BCM
- 2008: 16.0 BCM

Domestic gas production is expected to decrease on the amount 2.3 BCM by 2008. However Falcon Oil & Gas Ltd. (Canada, with its wholly owned subsidiary: TXM) started its six-well drilling program for a deep gas project in the Mako Trough of southeastern Hungary. There are over pressured cells in the northern-most reaches of the Mako Trough. Basin Centered Gas Accumulations (BCGA) are typically found in abnormally pressured systems and TXM intends to test the BCGA concept with an aggressive drilling program designed to assess the entire Mako Trough. The hopeful project’s expected success can change the decreasing trend of domestic gas production.





Annual Report 2006
to the European Commission

Budapest, July 2007

Production and import investments of the next three years:

- Domestic production:

The Makó Ditch is located south-east from Hódmezővásárhely, where geological layers capable of containing oil and natural gas sunk 10 million years ago, and therefore its depth is 3500-6000 m instead of the 'normal' 2000 meters. The subsidiary of the Canadian FALCON Corporations affiliate, the TXM Olaj-és Gázkutató Kft, performing exploration in Hungary since the beginning of 2005 and has achieved significant results. After the deepening of five high depth exploration wells – including Makó-7, the new Hungarian depth record with 6,054 m – and hundreds of kilometers of 3D seismic geophysical imaging, they submitted the final exploration report to the Hungarian Geological Service (MGSZ) in October 2006, following the evaluation of the results. After an in-depth analysis of the report, on 21st December 2006, MGSZ approved the final report and officially declared that the potential natural gas reserve of the Makó ditch is expected to be multiple times of the annual national gas consumption, which serves as a basis for high expectations.

TXM starts exploitation of the field in the beginning of 2007. The have received the licenses from Mining Bureau of Hungary for establishing a mine plot and constructing upstream pipelines.

Hydraulic fracturing programs are planned in 6 boreholes in 2007, which would allow the natural gas (BCGA – basin centered gas accumulation) present in extreme circumstances (high depth, high pressure and temperature) to be produced.

If the fracturing programs are successful, the well network will probably be extended.

The building of two accumulating-storage stations is planned, to be connected to the nearby Algyő Gas Processing Plant (operated by MOL Nyrt.). MOL Nyrt. can only use 20 % of the nominal capacity of the gas processing plant currently, therefore they are able to receive the probably larger amount of Makó natural gas within the framework of a separate contract. If hydraulic fracturing is successful, the implementation of a node point development project is planned in Algyő.


The Economist Intelligence Unit
Country Profile 2008
Hungary


Natural gasfield discovered

Energy problems solved?

Hungarys fears for its energy security are well founded. However, it now appears
that Hungary may have one of Europe’s largest natural gas deposits. A report by the Scotia Group (US) in 2007, a world leader in measuring unconventional
hydrocarbons resources, stated that the Mako Trough, a gasfield operated by
Canadas Falcon Oil and Gas, has at least 617bn cu metres of gas recoverable with a 90% probability. With Hungarys total consumption at 13bn-14bn cu metres per year, this is enough for about 45 years. Moreover, with 50% probability arguably, a more likely case resources at Mako rise to 1.55trn cu metres, which would make it one of the largest gasfields in Europe.
Such unconventional resources are more difficult and expensive to extract.
Whereas gas in Hungary has traditionally been extracted from depths of 2,500
metres or less, Makos gas is at 3,000-6,000 metres. Moreover, much of it is packed inside very dense, impermeable rock. Finally, Hungarys geothermal activity, which makes it such a successful spa destination for tourists, means that the gas must be extracted from depths where underground temperatures can reach 250°C, which is hot enough to cause serious difficulties for normal drilling and mining equipment.

Falcon completed phase 1 of its testing programme in August 2007, which comprised six exploratory wells drilled. The company found gas at both the Szolnok and Basal Conglomerate formations, in addition to finding oil and gas at the Endrod formation.

In November 2007, Falcon submitted a Technical Operating Plan to the Hungarian
Mining Bureau, which will focus on the completion of the existing Mako-4, Mako-6
and Mako-7 wells. Falcon expects the testing programme to commence in the second quarter of 2008 and to continue into early 2009. This indicates slower than expected progress compared with earlier estimations that production at the field could start in 2007. The company also said it is in negotiations with several potential strategic partners for the project.

The Economist Intelligence Unit is the world's foremost provider of country, industry and management analysis. Founded in 1946 when a director of intelligence was appointed to serve The Economist, the Economist Intelligence Unit is now a leading research and advisory firm with more than 40 offices worldwide. For over 60 years, the Economist Intelligence Unit has delivered vital business intelligence to influential decision-makers around the world. Our extensive international reach and unfettered independence make us the most trusted and valuable resource for international companies, financial institutions, universities and government agencies.