Falcon is a global energy company with projects in Hungary, Australia & South Africa

Developing large acreage positions of unconventional and conventional oil and gas resources

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Message: Some details of the filing

Some details of the filing

posted on Jan 30, 2010 11:23AM

Placement terms

The full terms and conditions of the Offer are set out in the Term Sheet (attached as Appendix A). The rights attaching to the Shares and Options are subject to the provisions set out in the Company’s constitution, a copy of which is available on request, and the Corporations Act.

Purpose of capital raising

The purpose of the capital raising is to fund Falcon Australia’s work programme in respect of petroleum exploration permits EP 76, 98, 99 and 117 for the calendar year 2010 and for working capital purposes.

Company background

On 21 August 2008, Falcon Australia was incorporated under the law of Victoria, Australia, as a wholly owned subsidiary of Falcon Oil & Gas Ltd. (Falcon).

Falcon is an international oil and gas exploration and production company, headquartered in Denver,Colorado, incorporated in British Columbia, Canada, and trading on the TSX Venture Exchange under the symbol "FO”. Falcon has reporting obligations in the jurisdictions of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland.

Falcon specialises in the business of conventional and unconventional oil and gas exploration and production and holds interests in prospective properties in Hungary and Australia. Falcon is focused on discovering, acquiring, and maturing a globally diversified portfolio of drilling opportunities with a goal of maximizing shareholder value through strategic relationships.

Beetaloo Basin Project

The scale and scope of Falcon Australia’s business activities are restricted to the Beetaloo Basin Project.

Falcon Australia’s interest in the Beetaloo Basin consists of four petroleum exploration permits (the Permits) comprising approximately 28,200 square kilometres (7 million gross acres), covering the majority of the Beetaloo Basin and basin margin highs. Falcon Australia owns an undivided 75% working interest in the Permits and is the operator of the Permits.

Falcon Australia and Falcon have entered into a binding heads of agreement with PetroHunter Energy Corporation and its wholly owned subsidiary, Sweetpea Petroleum Pty Ltd, to acquire Sweetpea Petroleum Pty Ltd’s remaining 25% interest in the Permits (Sale Agreement). In consideration for the assignment to Falcon Australia of the undivided 25% working interest in the Permits, Sweetpea Petroleum Pty Ltd will be issued 25% of the shares in Falcon Australia (prior to the issue of Shares under the Offer).

The Beetaloo Basin, part of the larger MacArthur Basin, is a Pre Cambrian Basin in the Northern Territory, approximately 600 kilometres south of Darwin. Multiple conventional and unconventional oil and gas opportunities have been identified. The Beetaloo Basin has more than 3,000 metres of sediment column in which two world class source rocks have been identified, the oil and gas generating Kyalla Shale and the gas generating Velkerri Shale. The main hydrocarbon plays in this large basin are in the shale reservoirs and in the sandstones adjacent to them. Each source rock is widespread with thickness up to 800 metres. Some of the sandstones have conventional porosities and permeabilities and numerous conventional structures have been mapped from over 2000km of 2D seismic. Eleven wells have already been drilled in the Beetaloo Basin in the 1990s. All of the wells showed presence of oil and gas.

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