Canada-based hydrocarbon exploration company Falcon Oil and Gas announced late Thursday it is seeking a strategic partner to exploit the potential of a major natural gas exploration project the company is currently undertaking in Southeastern Hungary.

“Today’s announcement is part of the company’s long-term plan and commitment to prepare for large-scale drilling and development on our 245,000-acre production license, and reflects our focus on laying the foundation to move beyond exploration to production,” Falcon Chairman and CEO said in a statement.

Falcon, which recently received a long-term production license from the Hungarian government for its Mako concession in Southeast Hungary, is drilling or testing seven wells across the concession area.

Late last year an independent report estimated that the fields could contain 21.8 trln cubic feet (ca. 617 bln cubic meters) of natural gas with a 90% probability, and 54.9 trln cubic feet (ca. 1,555 bln cubic meters) of gas with a 50% probability - amounts that could theoretically
make Hungary self-sufficient in natural gas.

Falcon said that it is seeking a strategic partner that can add value to the project by contributing to the technical understanding of the assets, accelerating development, securing services required for commercial production of oil and gas, and/or granting access to high-value end markets.

Falcon has contracted BMO Capital Markets as a financial advisor to help identify potential strategic partners, according to the statement.

The company stresses that the search for a strategic partner does not constitute a setback in the company’s Hungarian operations.

“Falcon’s short-term goals and strategy have not changed,” the company said. “We will determine the most appropriate course of action as we continue to evaluate our results in the field over the next several weeks and months, as we work to take appropriate steps to address the commercial development phase.”

Shares of Falcon Oil and Gas on Canada’s TSX Venture Exchange fell 29% immediately after the announcement and closed Thursday’s session 26% below the previous day’s close.

BS/PS

For further information please contact the reporter at email:
balazs.szladek@interfax-news.hu or by telephone on: (+36) 1 269 7808.

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