Ireland-based Falcon Oil & Gas Ltd. reported that Hess Australia (Beetaloo) Pty Ltd. (Hess) has forfeited its rights to earn 62.5 percent in three of the permits in northern Australia's Beetaloo Basin as it did not commit to drilling the five wells by the agreed deadline of 10 p.m. on June 28.
Hess was granted the rights to farm-in to the three permits in accordance with the Participation Agreement of April 28, 2011. This was amended Aug. 2, 2012 to give Hess more time to make a decision on its drilling commitment in the Beetaloo permits.
Falcon's Board rejected a late request by Hess to defer the election date again for the following reasons.
"We regard the Beetaloo Basin as a potential world class conventional and unconventional play with significant oil and gas potential. Hess requested a one month extension to allow them sufficient time to conclude a farm-out deal with a third party, which they described as one of the largest oil and gas companies in the world," said Philip O’Quigley, CEO of Falcon in a press release.
"Falcon’s rejection of their request and Hess’s subsequent decision not to elect by the agreed deadline was viewed by the Board of Falcon as an opportunity for Falcon shareholders to increase their interest in what promises to be a very prolific basin enhanced and de-risked by the new seismic data."
"I would like to thank Hess for their significant contribution to the Beetaloo project both in terms of their technical input but also in terms of their financial investment which we estimate to be approximately $80 million to date. I look forward to updating the market as we move forward on our extensive acreage in the Beetaloo Basin,” O'Quigley added.
Falcon owns the four exploration permits covering approximately 7 million acres (approximately 28,000 square kilometers) in the Beetaloo Basin. RPS Energy, in its independent Competent Person's Report dated Jan. 1 estimates gross un-risked recoverable prospective resource (play level) potential of 162 trillion cubic feet of gas and 21,345 million barrels of oil (P50) for Falcon's Beetaloo Exploration Permits.
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