>If not do we stand a real chance of losing this potential valuable acreage?

Just to clarify even further that what TK and John have already said, Falcon currently has 3 licenses.

Mako Exploration License

Tisza Exploration License

Mako-Arok Production License

The JV covers 75% of the Production License. The remaining 25% of the PL is owned 100% by Falcon. This production license is valid for 35 years total, and covers the BCGA (Basin Centered Gas Accumulation) on Falcons land.

The areas outside of the JV area are covered by the exploration licenses, both which expire at the end of this year. However, Falcon has an additional year to apply for a production license on those areas...so there is no risk of loosing that land until Dec 31, 2010.

Falcon mentioned in their latest MD&A that they are currently trying to get new exploration licenses for those areas. If they do, they will be good until 2018.

Another approach they are trying, is to get the Production License expanded to cover portions of the exploration license areas.

In any case, they aren't at risk of loosing anything until Dec 31, 2010 at the earliest.

Even if they do loose them at that point, it might not be a big deal anyway. The exploration licenses are outside of the boundries of the BCGA. The land might only be good for growing garlic and onions :)

If some of the seismic Falcon has done shows that there are prospective conventional oil & gas accumulations, then they will probably get a production license to cover those areas. As I mentioned a couple of weeks ago, that's what Toreador is doing (applying for a PL based on seismic)