Falcon announces Interim results for Three Months Ended 31 March 2014
Falcon Oil & Gas Ltd. announces that it has filed its results for the three months ended 31 March 2014.
— Transformational Farm-Out Agreement and Joint Operating Agreements (“the Agreements”) of Beetaloo permits, Northern Territory, Australia to carry Falcon in a nine well exploration and appraisal program over five years with Origin Energy Resources Limited, a subsidiary of Origin Energy Limited (“Origin”) and Sasol Petroleum Australia Limited, a subsidiary of Sasol Limited (“Sasol”), “the Farminees”.
— Drilling to commence following completion of the Agreements.
— Origin and Sasol to pay Falcon A$20 million cash on completion of the Agreements.
— Origin and Sasol to each earn 35% interest in the Permits.
— Falcon to retain a 30% interest in the Permits.
— Origin to be the Operator.
— Farminees will pay for the full cost of completing the first five wells estimated at A$64, million, and will fund any cost overruns. This work is expected to be completed within the first three years.
— Farminees to pay the full cost of the following two horizontally fracture stimulated wells, 90 day production tests and micro seismic with a capped expenditure of A$53 million.
— Farminees to pay the full cost of the final two horizontally fracture stimulated wells and 90 day production tests capped at A$48 million.
— Spudding of the second well in Hungary, fully carried by Naftna Industrija Srbije JSC (“NIS”),
— Continued focus on strict cost management and efficient operation of the portfolio.
— Strong financial position, debt free with cash and cash equivalents at US$6.9 million (31 December 2013: US$8.4 million).
Philip O’Quigley, CEO of Falcon commented:
“2014 has been a busy year for Falcon with the execution of the Agreements with Origin and Sasol of our Beetaloo permits in the Northern Territory Australia. Together with the A$20 million, the deal is worth up to approximately A$200 million to Falcon. I can confidently state that this carry and work programme is a great deal for our shareholders. In addition, we have spudded the second well in Hungary with our partner NIS. I look
forward to updating the market and making further announcements on the Group’s progress in due course.”