Serbia's NIS Fails to Complete Well Drilling Program Agreed With Falcon Oil&Gas

Falcon Oil&Gas said on Monday the extension granted to its partner, Novi Sad-based oil and gas company NIS [BEL:NIIS], regarding a three-well drilling and testing programme in Hungary has expired with the Serbian firm failing to fulfil its commitments.

In January 2013, Falcon agreed a three-well drilling programme with NIS to target the Algyo play in Hungary with the Serbian firm making a cash payment of $1.5 million (1.34 million euro) to Falcon in February 2013, and agreed to drill three wells by July 2014.

In July, Falcon Oil&Gas extended to December 31 the date for completion of the three well programme with NIS so that the Serbian company can complete the testing of the Besa-D-1 well, evaluate the hydrocarbon potential of the entire Mako Trough including the Deep Mako play and fulfill the third well obligation of the drilling programme.

As of December 31, NIS has only drilled and tested two wells and Falcon is currently evaluating, and will pursue, all options available to the company to derive shareholder value as NIS has not fulfilled its commitments under the agreement, Falcon Oil&Gas said in a statement.

NIS, majority-owned by Russia's Gazprom Neft, is one of the largest vertically integrated oil and gas companies in Southeast Europe. Its main activities include the exploration, production and processing of oil and gas, as well as the production and retail of a wide range of petroleum products.

Falcon is an oil and 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.

Source: SeeNews