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Tuesday, 3 September 2013
Falcon Oil & Gas 'very confident' of landing blue-chip partner in Australia
Falcon Oil & Gas (LON:FOG) (CVE:FO) said it is “very confident” of landing a farm-in partner that will ensure all the plays of its Betaloo Basin property, in Australia, are drilled.
"Falcon is well advanced in its discussions with a number of companies and is very confident of securing an attractive farm-out deal with a large oil and gas company,” it told investors as part of an update on its progress in the first half of the year.
In July the group revealed that Hess elected not to pull the trigger on a five-well programme after being refused a month-long extension to its agreement with London and Dublin-listed explorer.
However, Falcon reported unsolicited interest from other “major” companies looking to partner on what is shaping up to be a world-class conventional and unconventional oil and gas play.
In Hungary, meanwhile, preparations for testing the recently drilled Kutvolgy-1 well are now underway and in South Africa the group is waiting the award of unconventional exploration licence in Karoo Basin.
Chief executive Philip O'Quigley said: "The first half of 2013 has been extremely busy for Falcon with drilling in Hungary and seismic in Australia paving the way to the realisation of the potential of our assets.
“We are encouraged by the on-going discussions and comments from government ministers in South Africa and are well positioned to progress in the region alongside our partner Chevron.
“With active discussions currently underway regarding our assets in Australia we look forward to further significant developments in the second half of the year."
At 1.15pm in London, the stock was up 3% at 12.2p – though this is still well below broker Cantor Fitzgerald’s price target of 25p a share.
Cantor reckons the group will have its “pick” of partners, with BG (LON:BG), Statoil (ETR:DNQA), Total (EPA:FP) and ConocoPhilips (NYSE:COP) among the raft of new entrants.
It said Falcon is currently talking to four potential partners, and adds that the farm-out could be provide a significant share price catalyst.