>Hey Soly. Do you know if, when, Falcon will get any drilling results in from Australia???? That would be the only thing in my opinion that will give this stock some legs aside from the potential JV. Eddie

Thanks for the question Eddie; I knew that you will come through. Believe it or not, but the subject line of my next post would have been:

‘What no questions’

I’m worried about your memory though, you don’t seem to recall what Chris Brown said just a few days ago.

http://agoracom.com/ir/Falcon/forums/discussion/topics/411419-falcon-update/messages/1355372#message

Well, I took Eddie’s advice, and sent off an email to Christopher Brown. Chris in his prompt reply has explained that he’s still under restriction due to the fact that BMO is a representative to Falcon in an ongoing effort to farmout certain acreage in Hungary. Therefore, the Bank’s policy prevents him from giving an opinion, but not from addressing factual items.

The first item is Exxon. Chris explains that Exxon has successfully drilled a well into a fractured tight gas system which was in contact with fresh water aquifer. The micro-fractures cannot be seen on seismic; therefore it was not a glaring technical error. To pursue the opportunity, there is a need for better methodology, and without it this could be a consistent risk throughout the Makó trough. Exxon’s agreement with MOL, allows Exxon to pursue this opportunity without Falcon in the surrounding area, and in another tight gas basin in the northeast of the Makó Trough. Hence, there was no incentive for Exxon to continue the work on Falcon’s land, because the refinement of the seismic to identify non-fractured zones could take over a year to re-process plus requires additional drilling information.

So, there you have it. Exxon wanted to save $100 million. However, stays in Hungary to pursue the opportunity later. Of course, the XTO acquisition should come quite handy.

Now, let’s move to item two. Again, Chris gave me the quick facts. The Beetaloo Basin is a gas prone area, and a number of operators made previous attempts to commercialize it. The conventional zones do not seem to have long term deliverability; therefore Falcon is pursuing the tight gas opportunities, where they have drilled a well and waiting for the area to dry up over the next couple of months to pursue the completion of this well. The completion will test the unconventional zones to find a method to make it commercial.

Okay. I guess buy the end of May we should see some serious activity at the Shenandoah-1 well.

The third item Chris mentioned was the Karoo Basin in South Africa. It is a known gas basin. A South African based company, Sasol has met with large success in the northeast extension of the basin in Mozambique. The agreement Falcon has is merely an opportunity to review the data and put in an application on an area for unconventional exploration. It’s a non-exclusive agreement where there are other majors reviewing other areas of this basin. The challenge here is that South Africa has a limited distribution system for NG and the use of feedstock for industrial purposes limited due to the country’s overwhelming coal reserves, which also makes it politically sensitive due to the need for employment for coal mines.

Basically, that’s it Eddie, I hope you find this helpful and you’ll sleep better tonight :)

Do your math and you should come up with June :)