XOM senses the start of something big in Hungary

"Analysis: Falcon Oil and Gas (Vancouver, B.C.) began drilling a seven well exploratory program on this license in 2006. It is located in the Pannonian basin of southeastern Hungary. Falcon has characterized the play as similar to the Pinedale anticline in Wyoming’s greater Green River region. The Scotia Group in Dallas has estimated a theoretical potential recovery from the Mako Trough as high as 96 trillion cubic feet. This is greater than the proved natural gas reserves in Texas. By year-end 2006, Falcon revealed that six wells had promising shows. The license area is south of the city of Szolnok and is adjacent to the Romania/Montenegro frontier. Natural gas has been discovered in several regions of Hungary and is part of the MOL portfolio of producing properties. MOL is associated with Gazprom in some projects and it currently the subject of a takeover bid by OMV, the Austrian natural gas company which also has ties to Gazprom. A significant natural gas development would put XOM into competition with Gazprom for natural gas sales in eastern Europe and would be a plus for the European Union’s desire to broaden participation in the EU energy market. Seen in this light, it could be an important move by XOM and one which could have a high profit potential when considered in the well-advertised (and unpopular) pricing plans of Gazprom for future years."

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