The Daily Monitor
Falcon Oil & Gas (FOGL LN, 31.8p, ▼ 0.78%): A Major Step Forwards - Falcon disclosed overnight that it has signed an agreement with NIS, a Serbian oil and gas company, with a view to progressing its exploration acreage. This is a significant step forwards for the Company as it not only kick-starts the exploration programme, but also allows it to redeploy its share capital to other projects. In the wider context, we can't help think that the existing portfolio is too diverse for a Company of Falcon's size and resources. Still, if it keeps doing deals like today's, it will cease to become an issue.
In this news:
NIS to drill three exploration wells targeting the shallow "Algyo Play" reservoir
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Falcon to be fully carried on the drilling and testing estimated to cost a minimum of $20m
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NIS to make an immediate cash payment of $1.5m to Falcon
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Drilling preparations are already underway
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Falcon and NIS expect to commence drilling the first well by the end of March 2013
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Second and third wells likely to be completed by the end of Q3 2013
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NIS to earn 50% of any net production revenues from the 3 wells
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Falcon to retain 100% in the "Deep Mako Trough" potential below the Algyo
