FALCON OIL & GAS LTD. ANNOUNCES LETTER OF INTENT WITH HESS CORPORATION...
posted on
Feb 22, 2011 08:56AM
Developing large acreage positions of unconventional and conventional oil and gas resources
TSXV Symbol: FO
DENVER, CO, Feb. 22 /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 entered into a letter of intent with Hess New Ventures
Limited ("Hess"), a unit of Hess Corporation, for the acquisition by Hess of
an interest in onshore Exploration Permits 76, 98 and 117 in the Beetaloo
Basin, Northern Territory, Australia (the "Agreement Area").
The agreement area consists of approximately 25,200 square kilometers
(6,227,500 acres) and will ultimately be held jointly, with Falcon Australia
holding a 37.5 percent undivided working interest and Hess holding a 62.5
percent undivided working interest. Falcon Australia will retain 100 percent
interest in the whole of Exploration Permit 99 consisting of approximately
2,590 square kilometers (639,300 acres), and will also retain the entire
interest in the existing Shenandoah-1 wellbore in Exploration Permit 98 and
approximately 405 square kilometers (100,000 acres) around the Shenandoah-1
wellbore. This will result in Falcon Australia retaining a net interest in the
four exploration permits of approximately 44%.
Under the terms of the letter of intent, Hess will make a US$17.5 million
payment to Falcon Australia upon completion of a participation agreement and a
joint operating agreement. Hess will pay Falcon US$2.5 million and Falcon will
issue Hess 10,000,000 warrants exercisable into an equal amount of common
shares in the capital of Falcon ("Shares") at an exercise price per Share
equal to the greater of the closing price of the Shares on February 18, 2011
and February 22, 2011.
Under the terms of the agreement Hess will undertake a US$40 million
seismic acquisition program beginning in 2011. After completion, processing
and interpretation of the seismic data Hess can elect to continue to the next
phase of the work program which includes conducting a five well program to
explore and appraise the agreement area, beginning in 2012. Hess will cover
the full cost of this work program.
Falcon Australia plans to test the prospective intervals in the
Shenandoah-1 wellbore in the third quarter of 2011. Upon conclusion of the
testing Hess will pay Falcon Australia US$2 million for the data acquired.
Robert Macaulay, CEO of Falcon and Falcon Australia, said, "Falcon is
very excited to enter in to this partnership with Hess and looks forward to
working with them to explore and develop the Beetaloo Basin. Not only does
Hess bring to the table their vast international experience in both
conventional and unconventional plays, but they are also a well-established,
trusted and successful company in Australia."
The participation agreement and the joint operating agreement are subject
to the approval of the Board of Directors of each of Falcon, Falcon Australia
and Hess, and the transaction as a whole is subject to receipt of all
governmental and regulatory consents, including the TSX Venture Exchange.
About Falcon Oil & Gas Ltd.
Falcon Oil & Gas Ltd. is an international oil and gas exploration and
production company, headquartered in Denver, Colorado, incorporated in British
Columbia, Canada, and trading on the TSX Venture Exchange under the symbol
"FO." The company specializes in the business of unconventional and
conventional oil and gas exploration and production and holds interests in
prospective properties in Australia, Hungary, and South Africa. The company
is focused on discovering, acquiring, and maturing a globally diversified
portfolio of drilling opportunities with a goal of maximizing shareholder
value through strategic relationships. Additional information concerning
Falcon Oil & Gas Ltd. is available at www.falconoilandgas.com. Investor
inquiries may be directed to investor@falconoilandgas.com.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.
Certain information in this press release may constitute forward-looking
information. This information is based on current expectations that are
subject to significant risks and uncertainties that are difficult to predict.
Actual results might differ materially from results suggested in any
forward-looking statements. Falcon assumes no obligation to update the
forward-looking statements, or to update the reasons why actual results could
differ from those reflected in the forward looking-statements unless and until
required by securities laws applicable to Falcon. Additional information
identifying risks and uncertainties is contained in Falcon's filings with the
Canadian securities regulators, which filings are available at www.sedar.com.
To view this news release in HTML formatting, please use the following URL:
http://www.newswire.ca/en/releases/archive/February2011/22/c4785.html
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/For further information:
Additional information concerning Falcon Oil & Gas Ltd. is available at
www.falconoilandgas.com. Investor inquiries may be directed to
investor@falconoilandgas.com.