Falcon announces final approval of a multi-well drilling exploration program with NIS
Falcon Oil & Gas announced that its Hungarian subsidiary TXM Oil & Gas has executed the agreement in relation to a significant exploration program with Naftna Industrija Srbije (NIS) in which Gazprom Neft has a 56% stake.
The Algyo is a relatively shallow play between 2,300 m and 3,500 m. A number of Falcon wells have been drilled through the Algyo in recent years, some of which encountered gas shows, but to date no well has ever tested the play concept at an optimal location as previous wells targeted deeper intervals of up to 6,000 m.
Multiple Algyo prospects have subsequently been identified by Falcon through extensive AVO analysis and the upcoming exploration drilling program with NIS will be targeting three separate high-graded prospects. Under the terms of the Transaction, NIS shall drill three exploration wells targeting the "Algyo Play" within the company' s Mako Trough production licence in the Pannonian Basin, Hungary. NIS will earn, after undertaking the three well drilling obligation, 50% of the net production revenues from the three wells drilled. In addition, NIS will have an option to acquire a right of first negotiation for future drilling operations in the "Algyo Play", sharing any potential future costs and revenue 50:50 with Falcon. Falcon will still retain 100% interest in the "Deep Mako Trough".