Monday, May 2, 2011

FO announces Participation Agreement with Hess Australia for Beetaloo Basin Project

DENVER, May 2 /CNW/ - Falcon Oil & Gas Ltd. ( "Falcon"), an international oil and gas exploration and production company, announced today that Falcon Oil & Gas Australia Ltd ("Falcon Australia"), Falcon's 73 percent owned subsidiary, has signed a Participation Agreement with Hess Australia (Beetaloo) Pty Ltd ("Hess"), 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 (the "Agreement Area").

The terms of the agreement remain as outlined in the Letter of Intent between the two companies announced on February 22, 2011. In brief, and subject to certain regulatory approvals and standard conditions, Hess will earn a 62.5 percent working interest in approximately 25,200 square kilometers (6,227,500 acres) by making a payment to Falcon Australia, acquiring warrants in Falcon Oil & Gas Ltd., conducting an extensive seismic programme, and drilling five wells to explore and appraise the Agreement Area. Hess has the right to withdraw from the project following the seismic evaluation and again following the drilling phase, in which event the entire interest would transfer back to Falcon Australia. In addition to its 37.5 percent working interest in the joint acreage, Falcon Australia will retain 100 percent ownership in the entirety of EP99 and 405 square kilometers (100,000 acres) in EP98.

The seismic survey is anticipated to commence once necessary government and land users' approvals are obtained. Falcon Australia will also carry out its work planned for the Shenandoah-1 well, commencing with re-opening and casing the existing wellbore planned for the third quarter 2011, followed by a comprehensive testing program.

Source: CNW Group