Falcon Oil & Gas Ltd.
TSX VENTURE : FO
AIM : FOG

Falcon Oil & Gas Ltd.

December 17, 2013 02:00 ET

Falcon Oil & Gas Ltd.: Australia Beetaloo Basin Agreement to Reduce Overriding Royalty to 1%

DUBLIN, IRELAND--(Marketwired - Dec. 17, 2013) - Falcon Oil & Gas Ltd. (TSX VENTURE:FO)(AIM:FOG)(ESM:FAC) ("Falcon" or the "Company") announces that its subsidiary, Falcon Oil & Gas Australia Ltd ("FOGA"), has entered into an Agreement ("the Agreement)" with Malcolm John Gerrard, Territory Oil & Gas LLC and Tom Dugan Family Partnership LLC ("TOG Group") to acquire up to 7% (seven eighths) of the remaining 8% private Overriding Royalty Interest ("ORRI") over FOGA's Exploration Permits in the Beetaloo Basin for the following consideration:

  • FOGA will make a payment to TOG Group of US$5m to acquire 5% (five eighths) of their ORRI only on completion of a Beetaloo farm-out transaction acceptable to Falcon
  • TOG Group will grant FOGA a five year call option to acquire a further 2% (one quarter) of their ORRI for a payment of US$15m
  • All ORRIs acquired under the Agreement will be immediately cancelled by FOGA
  • TOG Group will retain a 1% ORRI

Philip O'Quigley, CEO of Falcon commented:

"We are delighted to have concluded a further significant reduction in the private Overriding Royalty Interest over our Australian assets.

This transaction, combined with the ORRI transaction announced on the 1st November 2013, will allow for the reduction of the privately held Overriding Royalty Interests from 12% to just 1% and will help to further progress our farm-out negotiations, which are at an advanced stage.

We have now completed two agreements to acquire 8% of the privately held Overriding Royalty Interests at a total cost of just $7m, of which $6m is payable only upon completion of a farm-out acceptable to Falcon. In addition, we have secured agreement to acquire a further 3% based on two five year call options granted to Falcon at a future combined cost of $20m leaving only a 1% Royalty in private hands."

About Falcon Oil & Gas Ltd.

Falcon is an international oil & gas company engaged in the acquisition, exploration and development of conventional and unconventional oil and gas assets, with the current portfolio spread between Australia, South Africa and Hungary. Falcon is incorporated in British Columbia, Canada and headquartered in Dublin, Ireland with a technical team based in Budapest, Hungary. FOGA is a 98% subsidiary of Falcon and is the registered holder of four Exploration Permits covering seven million acres in the Beetaloo Basin, Northern Territory, Australia.

About the Overriding Royalty Interests

The total amount of the private ORRI's is 12%. The ORRI entitles its owners to earn 12% of the gross well head proceeds of any future production, subject only to transportation and marketing costs. The TOG Group, predominately based in the USA is the owner of 8% with the balance of 4% being held by CR Innovations. The privately held ORRI's were created during the years 2006 to 2008 when the Exploration Permits were sold by their original owners.

For further information on Falcon Oil & Gas Ltd. please visit www.falconoilandgas.com.

Neither the TSX Venture Exchange nor 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.

Certain information in this press release may constitute forward-looking information, including comments made with respect to when payments due under the agreement will be made. This information is based on current expectations that are subject to significant risks and uncertainties that are difficult to predict. Actual results might differ materially from results suggested in any forward-looking statements. Falcon assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward looking-statements unless and until required by securities laws applicable to Falcon. Additional information identifying risks and uncertainties is contained in Falcon's filings with the Canadian securities regulators, which filings are available at www.sedar.com.

Contact Information

  • Falcon Oil and Gas Ltd.
    +353 1 417 1900
    www.falconoilandgas.com

    Falcon Oil and Gas Ltd.
    Philip O'Quigley
    CEO
    +353 87 814 7042

    Falcon Oil and Gas Ltd.
    John Craven
    Non-Executive Chairman
    +353 1 417 1900

    FTI Consulting
    Edward Westropp
    +44 207 269 7230

    FTI Consulting
    Natalia Erikssen
    +44 207 269 9348

    Davy (NOMAD & Joint Broker)
    John Frain
    +353 1 679 6363

    Davy (NOMAD & Joint Broker)
    Anthony Farrell
    +353 1 679 6363

    GMP Securities Europe LLP (Joint Broker)
    Rob Collins
    +44 20 7647 2800

    GMP Securities Europe LLP (Joint Broker)
    Liz Williamson
    +44 20 7647 2800

    Cantor Fitzgerald Europe (Joint Broker)
    David Porter
    +44 207 894 7000

    Cantor Fitzgerald Europe (Joint Broker)
    Richard Redmayne
    +44 207 894 7000