Falcon's Chairman and CEO, Marc A. Bruner, stated, "With the assistance and capabilities of our world-class advisors, we're optimistic about concluding one or more transactions that will add significant value to our assets and will provide the capability to further define and determine the commercial potential of these properties."
The Merrill Lynch and BMO Agreements
The execution of the Agreements is the first step in Falcon's strategic partner initiative (the "2009 Initiative"). Under the 2009 Initiative, Falcon will be seeking one or more third parties with the financial and/or technical capabilities to participate in exploration and development activities on the 100% Falcon Acreage.
Sean Mueller, project lead for Merrill, said, "Merrill Lynch has one of the largest energy teams on Wall Street, with offices in nine countries, and with a substantial track record in unconventional gas transactions. Production from unconventional gas has completely changed the natural gas market in North America. Marc A. Bruner has been an industry pioneer in unlocking the potential at Jonah and Pinedale in the Rocky Mountains. He and his team have now taken that experience and expertise and expanded internationally to Hungary. Unconventional gas will become extremely important to Europe's overall gas supply. Falcon's Mako interests represent a unique opportunity in one of the most advanced unconventional plays in Europe."
Hungary Strategic Partner Initiative - Production License and Exploration Licenses
- As previously announced, under the transaction with ExxonMobil in April 2008, Falcon retained sole ownership and operatorship of 391,400 acres (collectively, "100% Falcon Acreage") outside the Falcon, ExxonMobil, MOL Contract Area, as follows:
- Falcon Lands in Mining Plot: Falcon has 100% ownership in the 25% portion (61,400 acres) of the Mining Plot (long-term "Production License") that is not part of the Contract Area.
- Exploration Licenses: Falcon has 100% ownership in 330,000 acres which are outside the boundaries of the Production License, and continue to be part of the original Makó Exploration License and original Tisza Exploration License.
- Shallow Rights: Falcon also owns 100% of those portions of the Mako and Tisza Exploration Licenses which are above 2,800 meters within the boundaries of the entire 246,000-acre Production License (including the 61,400 acres mentioned above).
It is presently expected that the 2009 Initiative will result in Falcon entering into one or more agreements under which third parties might acquire an undivided interest within the 100% Falcon Acreage. Mr. Bruner commented, "ExxonMobil is now evaluating the Foldeak-1 well for testing, and we're looking forward to seeing those results. We're pleased with our relationship with ExxonMobil and MOL and the status of the joint development project." Mr. Bruner continued, "However, when you consider the areas to the east and north of the Falcon, ExxonMobil, MOL acreage, there is significant Szolnok potential for further exploration and development. As we approach the point in time when we will begin to see test results from the Foldeak, we will apply that information to our 100% owned acreage, together with the extensive data that we have separately developed throughout this area, including the well data from our 2006-07 drilling program and our seismic information. The initiative that we started in 2007 resulted in our joint development agreement with ExxonMobil and MOL. Similarly, our plan is that the 2009 strategic partner initiative will lead to one or more transactions on our 100% owned acreage in Hungary."
Source: CNW Group
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