Canadian listed oil and gas company Falcon Oil & Gas Ltd’s (TSX-V: FO) local 73% subsidiary Falcon Oil & Gas Australia Limited, holds a 100% working interest in four onshore exploration permits, covering almost the entirety of the Beetaloo Basin in the Northern Territory, Australia. The Beetaloo Basin is of Pre-Cambrian age and is situated approximately 600 kilometres south of Darwin. The property consists of four exploration permits which encompass approximately 28,326 kilometres (7,000,000 acres).

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. The sandstones have conventional porosities and permeabilities and numerous conventional structures have been mapped from over 2000 kilometres of 2D seismic. Eleven wells have already been drilled in the basin during the 1990s and all of the wells showed the presence of oil and gas.

Hess Corporation has also entered the Northern Territory and the race for conventional and unconventional oil with a recent farm-in agreement via Hess Australia. On May 2, 2011 Falcon Oil & Gas Ltd. announced that Falcon Oil & Gas Australia Ltd signed a Participation Agreement with Hess Australia (Beetaloo) Pty Ltd, an affiliate of Hess Corporation, for the acquisition of an interest in onshore Exploration Permits 76, 98 and 117 in the Beetaloo Basin, Northern Territory, Australia.

Hess will earn a 62.5 % working interest in approximately 25,200 square kilometres (6,227,500 acres) by making a payment to Falcon Australia, acquiring warrants in Falcon Oil & Gas Ltd., conducting an extensive seismic program, and drilling five wells to explore and appraise the Agreement Area. The seismic survey is anticipated to commence once necessary government and land users' approvals are obtained. Under the terms of the letter of intent, Hess will make a US$17.5 million payment to Falcon Australia upon completion of a Participation Agreement and a Joint Operating Agreement.

Under the terms of the agreement, Hess will undertake a US$40 million seismic acquisition program beginning in 2011. After completion, processing and interpretation of the seismic data Hess can elect to continue to the next phase of the work program which includes conducting a five-well program to explore and appraise the agreement area, beginning in 2012. Hess will cover the full cost of this work program. Falcon Australia plans to test the prospective intervals in the Shenandoah-1 wellbore in the third quarter of 2011.

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