Falcon Oil & Gas CEO Philip O'Quigley said Monday that the company is "very disappointed" with its partner, Naftna Industrija Srbije, after its failure to drill a third well on Falcon's Mako Trough license, onshore Hungary, within the timeframe agreed between the two companies.
In January 2013, Falcon and NIS agreed to complete a three-well drilling program targeting the Algyo play by July 2014. Under the terms of the agreement NIS made a cash payment of $1.5 million and agreed to carry Falcon for 100 percent of all costs associated with the drilling and testing program.
The deadline was extended in July 2014 until December 31 2014 to enable NIS to fulfil the program, but NIS had only drilled and tested two wells by the new deadline.
Falcon said that it is currently evaluation the options available to it.
O'Quigley said in a company statement:
"We would like to thank NIS for their partnership over the last two years. The first two wells in the three-well program were drilled and tested professionally. However, we are very disappointed that NIS has not fulfilled its obligations in accordance with the terms of the agreement and we will now pursue all options available to the company."
"Falcon remains focused on the potential farm-out of the Mako deep play and is currently working with industry to evaluate potential options."
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