TORONTO, Dec. 12, 2012 /CNW/ - Falcon Oil & Gas Ltd. (TSXV: FO) (Falcon), a Toronto listed and Dublin headquartered company focused on unconventional oil and gas exploration and producing assets in Australia, Hungary, and South Africa, announced today that it has entered into an Agreement (the Agreement) with Chevron Business Development South Africa Limited (Chevron) which allows both parties to jointly co- operate together in order to seek unconventional exploration opportunities in the Karoo Basin, South Africa.
Falcon currently has a Technical Cooperation Permit (TCP), which gives Falcon exclusive rights to obtain an Exploration Permit covering approximately 7.5 MM acres in the southern part of the Karoo basin.
The Agreement today provides for Falcon to work exclusively with Chevron for a period of five years in jointly obtaining Exploration Permits in the Karoo Basin subject to the parties mutually agreeing participation terms applicable to each permit and as such, there will be future announcements by Falcon when an Exploration Permit is awarded.
Chevron will make immediate cash payment of up to $1 million to Falcon as a contribution to past costs and from today will work with Falcon to secure Exploration Permits.
Philip O'Quigley, CEO of Falcon commented: "Today's Agreement with Chevron is a major step forward towards realising the full potential of our already significant acreage position in the Karoo Basin currently held under a TCP. Chevron has over 100 years of experience of working in South Africa but even more importantly has extensive experience in commercially and sensitively developing unconventional oil and gas resources. This Agreement is an encouraging endorsement of the management's confidence in the potential of the Karoo and we look forward to making future announcements when an Exploration Permit is awarded."
About the Karoo Basin
The Karoo Basin is large (236,000 mi2), extending across nearly two-thirds of the country, with the southern portion (70,800 mi2) of the basin potentially favourable for shale gas. A significant portion of Falcon's TCP (11,719 mi2) is located within the prospective area, along the southern boundary.
The Permian-age Ecca Group has three potential gas shales in the Ecca Formation. The most promising of these is the highly organic-rich, thermally mature shale of the Whitehall Formation. This unit is regionally persistent in composition and thickness and can be traced across most of the Karoo Basin.
An estimate of the undiscovered petroleum-initially-in-place, and the prospective (or undiscovered) resources attributable to these shales was carried out by Advanced Resources International ("ARI") on behalf of the US Energy Information Administration ("EIA"). The EIA's April 2011 report titled "World Shale Gas Resources: An Initial Assessment", estimated that the Lower Ecca Group shales in this basin contain approximately 1,834 trillion cubic feet of risked gas in-place, with risked recoverable shale gas prospective resources of 485 trillion cubic feet.
Please note that there is no certainty that any portion of the above quoted resource volumes will be discovered. If discovered, there is no certainty that it will be economically viable or technically feasible to produce any portion of the resources.
About Falcon Oil & Gas Ltd.
Falcon Oil & Gas Ltd. is an international oil and gas exploration and production company, Toronto listed under the symbol "FO." It is headquartered in Dublin, Ireland, with offices in Budapest, Hungary.
The company is focussed on unconventional and conventional oil and gas exploration and production, and holds assets in three major underexplored basins in Australia, Hungary, and South Africa.
For further information on Falcon Oil & Gas Ltd. please visit www.falconoilandgas.com
About Chevron Business Development South Africa Limited
Chevron Business Development South Africa Limited is a subsidiary of Chevron Global Energy Inc. Chevron is one of the world's leading integrated energy companies, with subsidiaries that conduct business worldwide. The company is involved in virtually every facet of the energy industry. Chevron explores for, produces and transports crude oil and natural gas; refines, markets and distributes transportation fuels and lubricants; manufactures and sells petrochemical products; generates power and produces geothermal energy; provides energy efficiency solutions; and develops the energy resources of the future, including biofuels. Chevron is based in San Ramon, California. More information about Chevron is available at www.chevron.com.
Neither the TSX Venture Exchange not 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.
Forward-looking statements include, but are not limited to, statements with respect to: the focus of capital expenditures; the sale, farming in, farming out or development of certain exploration properties using third party resources; the impact of changes in petroleum and natural gas prices on cash flow; drilling plans; processing capacity; operating and other costs; the existence, operation and strategy of the commodity price risk management program; the approximate and maximum amount of forward sales; Falcon's acquisition strategy, the criteria to be considered in connection therewith and the benefits to be derived therefrom; Falcon's goal to sustain or grow production and reserves through prudent management and acquisitions; the emergence of accretive growth opportunities; Falcon's ability to benefit from the combination of growth opportunities and the ability to grow through the capital markets; development costs and the source of funding thereof; the quantity of petroleum and natural gas resources or reserves; treatment under governmental regulatory regimes and tax laws; liquidity and financial capital; the impact of potential acquisitions and the timing for achieving such impact; expectations regarding the ability to raise capital and continually add to reserves through acquisition and development; the performance characteristics of Falcon's petroleum and natural gas properties; and realization of the anticipated benefits of acquisitions and dispositions.
Some of the risks and other factors, which could cause results to differ materially from those expressed in the forward-looking statements include, but are not limited to: general economic conditions in Canada, the Republic of Hungary, the Commonwealth of Australia, the Republic of South Africa and globally; supply and demand for petroleum and natural gas; industry conditions, including fluctuations in the price of petroleum and natural gas; governmental regulation of the petroleum and natural gas industry, including income tax, environmental and regulatory matters; fluctuation in foreign exchange or interest rates; risks and liabilities inherent in petroleum and natural gas operations, including exploration, development, exploitation, marketing and transportation risks; geological, technical, drilling and processing problems; unanticipated operating events which can reduce production or cause production to be shut-in or delayed; the ability of our industry partners to pay their proportionate share of joint interest billings; failure to obtain industry partner and other third party consents and approvals, when required; stock market volatility and market valuations; competition for, among other things, capital, acquisition of reserves, processing and transportation capacity, undeveloped land and skilled personnel; the need to obtain required approvals from regulatory authorities; and the other factors considered under "Risk Factors" in Falcon's annual information form ( AI") dated December 31, 2011. Risks and uncertainties that could cause Falcon's actual results to materially differ from current expectations have not changed from those disclosed in Falcon's Management's Discussion and Analysis (MD&A)as at December 31, 2011. The AIF and MD&A have been filed with Canadian securities regulatory authorities and are available at www.sedar.com. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement. Falcon disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required under applicable securities regulation.
In addition, other factors not currently viewed as material could cause actual results to differ materially from those described in the forward-looking statements.
SOURCE Falcon Oil & Gas Ltd.