The acreage is located in the Avoca Minerals Area, one of the richest natural gas producing areas in North America. The three prospects identified on good quality 3D seismic represent a potential of up to 570 billion cubic feet (BCF) total gas.
The 17,500 ft DB3 prospect is classified as a PUD and has 20 BCF of proven-undeveloped gas reserves. Side-tracking from existing wells on the structure may allow Falcon Natural Gas Corp. to rapidly and cost effectively put the field on production through the existing infrastructure.
The 17,000 ft Criss A prospect has potential for up to 50 BCF of gas and is located south of DB3.
The volumetrics of the third prospect, Marg 3, show this prospect to have a maximum potential of 500 BCF of gas. The structure is located at 19,000 ft and has been proven by two wells which were incorrectly located based on the newly interpreted seismic data. Analogous fields like the Garden City and Paterson Field are located to the west and have produced over 688 BCF and 250 BCF of gas respectively since their discovery in 1977.
In addition the 3D seismic data over the 8,000 acre Avoca Mineral Area has shallow spots as well such as the separate deeper prospects defined by well control and recently reinterpreted 3D seismic data which may lead to additional exploration prospects.
Falcon Natural Gas Corp. has acquired a 100% Working Interest in exchange for a 70% Net Revenue Interest on the initial 4,000 acres. Falcon Natural Gas Corp. has committed to pay $1,000,000 in cash and 2,500,000 in restricted shares for this acreage and the option on the additional 4,000 acres. $205,000 of the $1,000,000 has been paid in cash and the remainder will be paid along with the issuing of the restricted shares by the end of September 2004. The option on the additional acreage runs until January 2005.
"We are very excited about expanding our exploration program into the Louisiana area," said Alan Aitchison, President & CEO, Falcon Natural Gas Corp. "According to the seismic data available on the Avoca Minerals Area, already established natural gas production in prospective sands and presence of the analogous major gas fields nearby, we believe that this portfolio of Prospects has the potential of becoming an important natural gas discovery and expands our exploration program to a total of four prospects. FNGC will continue to raise additional capital to finance its rapid development phase."
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