Australia: Falcon Oil & Gas signs agreement with Hess for Beetaloo Basin project

Falcon Oil & Gas has announced that its 73% owned subsidiary Falcon Oil & Gas Australia has signed a Participation Agreement with Hess Australia (Beetaloo), an affiliate of Hess Corp, for the acquisition of an interest in onshore Exploration Permits 76, 98 and 117 in the Beetaloo Basin, Northern Territory, Australia.

The terms of the agreement remain as outlined in the Letter of Intent between the two companies announced on February 22, 2011. In brief, and subject to certain regulatory approvals and standard conditions, Hess will earn a 62.5 percent working interest in approx. 25,200 sq kms (6,227,500 acres) by making a payment to Falcon Australia, acquiring warrants in Falcon Oil & Gas, conducting an extensive seismic programme, and drilling five wells to explore and appraise the Agreement Area. Hess has the right to withdraw from the project following the seismic evaluation and again following the drilling phase, in which event the entire interest would transfer back to Falcon Australia. In addition to its 37.5 percent working interest in the joint acreage, Falcon Australia will retain 100 percent ownership in the entirety of EP99 and 405 sq kms (100,000 acres) in EP98.

The seismic survey is anticipated to commence once necessary government and land users' approvals are obtained. Falcon Australia will also carry out its work planned for the Shenandoah-1 well, commencing with re-opening and casing the existing wellbore planned for the third quarter 2011, followed by a comprehensive testing program.

Source: Falcon Oil & Gas