Mr. John Craven reports
FALCON OIL & GAS LTD - INTERIM RESULTS FOR THREE MONTHS ENDED 31 MARCH 2014
Falcon Oil & Gas Ltd. has released its results for the three months ended March 31, 2014.
The following should be read in conjunction with the complete interim financial statements and the accompanying management's discussion and analysis for the three months period ended March 31, 2014, filed with the TSX Venture Exchange. These filings are available on SEDAR and on Falcon's website.
Highlights:
- Transformational farm-out agreement and joint operating agreements of Beetaloo permits, Northern Territory, Australia, to carry
Falcon in a nine-well exploration and appraisal program over five years
with Origin Energy Resources Ltd., a subsidiary of Origin Energy
Ltd., and Sasol Petroleum Australia Ltd., a subsidiary
of Sasol Ltd.:
- Drilling to commence following completion of the agreements;
- Origin and Sasol to pay Falcon $20-million (Australian) cash on completion of
the agreements;
- Origin and Sasol to each earn 35-per-cent interest in the permits;
- Falcon to retain a 30-per-cent interest in the permits;
- Origin to be the operator;
- Farminees will pay for the full cost of completing the first five
wells estimated at $64-million (Australian), and will finance any cost overruns.
This work is expected to be completed within the first three years;
- Farminees to pay the full cost of the following two horizontally
fracture stimulated wells, 90-day production tests and microseismic
with a capped expenditure of $53-million (Australian);
- Farminees to pay the full cost of the final two horizontally
fracture stimulated wells and 90-day production tests capped at $48-million (Australian);
- Spudding of the second well in Hungary, fully carried by Naftna
Industrija Srbije JSC;
- Continued focus on strict cost management and efficient operation of the
portfolio;
- Strong financial position, debt free with cash and cash equivalents at
$6.9-million (U.S.) (Dec. 31, 2013: $8.4-million (U.S.)).
Philip O'Quigley, chief executive officer of Falcon, commented:
"Two thousand fourteen has been a busy year for Falcon with the execution of the agreements with Origin and Sasol of our Beetaloo permits in the Northern Territory, Australia. Together with the $20-million (Australian), the deal is worth up to approximately $200-million (Australian) to Falcon. I can confidently state that this carry and work program is a great deal for our shareholders. In addition, we have spudded the second well in Hungary with our partner NIS. I look forward to updating the market and making further announcements on the group's progress in due course."
Australia
Farm-out of Beetaloo permits, Northern Territory, Australia
As announced on May 2, 2014, Falcon Australia has executed definitive agreements including a nine-well farm-out agreement and joint operating agreements with Origin and Sasol, to each farm into 35 per cent of Falcon's exploration permits in the Beetaloo basin, Australia. The agreements are subject to conditions inter alia government, statutory authority consents and relevant stock exchange approvals.
Hungary drilling
Spudding of second well in Hungary
As announced on May 16, 2014, the second of three exploration wells, Besa-D-1, with the company's partner NIS to evaluate the gas potential of the Algyo formation at a depth of approximately 3,000 metres in the Mako trough, Hungary, has been spudded. The well testing operations on the first well, Kutvolgy-1, are now completed. The testing indicated that well production did not meet commercial rates. Falcon, with its partner NIS, has discontinued testing Kutvolgy-1, the well is to be plugged and abandoned. Falcon and NIS are now focused on Besa-D-1.
Results for operating activities
Falcon incurred a loss of $300,000 (U.S.) in the three months ended March 31, 2014, decreasing from a loss of $4.7-million (U.S.) in the three months ended March 31, 2013.
Falcon's cash and cash equivalent balance at March 31, 2014, was $6.9-million (U.S.) (Dec. 31, 2013: $8.4-million (U.S.)).
Appointment of communication adviser
Falcon has retained Camarco as its communication adviser to provide strategic and business advice with shareholders and investors. The initial fee is 5,000 British pounds per month which will increase to 6,000 British pounds after three months. Termination clauses are included in the contract, which are at both parties' discretion. Engagement with FTI Consulting, Falcon's previous communication adviser has now ended.
The appointment of Camarco is subject to TSX-V approval.
INTERIM CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
AND COMPREHENSIVE (LOSS)
(in thousands of U.S. dollars, except per share amounts)
Three months ended Three months ended
March 31, 2014 March 31, 2013
Oil and natural gas revenue $ 10 $ 3
Expenses
Exploration and evaluation expenses (198) (198)
Production and operating expenses (7) (5)
Depreciation (43) (145)
General and administrative expenses (1,019) (1,185)
Share based compensation (195) (95)
Foreign exchange (loss) (33) -
Other income 137 237
--------- ---------
(1,358) (1,391)
--------- ---------
Results from operating activities (1,348) (1,388)
Fair value gain (loss) --
outstanding warrants 991 (1,881)
Finance income 59 8
Finance expense (35) (1,485)
--------- ---------
Net finance income (expense) 24 (1,477)
--------- ---------
(Loss) and comprehensive (loss) for the
period $ (333) $ (4,746)
========= =========
(Loss) and comprehensive (loss)
attributable to
Equityholders of the company (329) (4,701)
Non-controlling interests (4) (45)
(Loss) per share attributable to
equityholders of the company
Basic and diluted $ (0.000) $ (0.007)
We seek Safe Harbor.
© 2024 Canjex Publishing Ltd. All rights reserved.