Falcon Oil & Gas Ltd. had completed a joint gas exploration programme in Hungary's Mako Trough with ExxonMobil and Hungarian oil and gas company MOL. Falcon completed the initial work programme, which involved a USD 50m commitment by Exxon Mobil Corp. and MOL, after finishing a third fracture at a well in the Szolnok Formation of the trough. ExxonMobil recommended earlier in the autumn that the exploration and production programme be abandoned after two fracture stimulation tests. But Falcon said both of its partners in the programme later agreed to fracture stimulate another section in the formation.

Falcon Oil & Gas Ltd. announced that the third fracture of the Földeák-1 well has been completed at a depth of approximately 3,850 meters within the Szolnok Formation of the Hungarian Makó Trough, and that the well has been temporarily plugged and abandoned to allow future access as required. The well was flowed for a 130 hour period. Initial gas flow rates of 20,000 standard cubic feet (560 cubic meters) per day depleted to 7,000 standard cubic feet (200 cubic meters) per day at the end of the flow period. Initial water flow rates averaged over 3,400 barrels (540 cubic meters) per day going to approximately 300 barrels (50 cubic meters) per day at the end of the flow period. H2S rates averaged 50ppm and CO2 averaged 10%. This third fracture test completes Production Ventures East Hungary Kft (ExxonMobil), and Hungarian oil and gas firm, MOL's, $50 million financial obligation under the Initial Work Program, and completes the Initial Work Program itself, under the Production and Development Agreement among Falcon, ExxonMobil, and MOL.

Falcon Oil & Gas Ltd. announced that the company has secured a Technical Cooperation Permit (the 'Permit') to evaluate the Karoo Basin in central South Africa. Falcon has up to one year to conduct a technical appraisal of the area covered by the Permit which will include review of the South African Petroleum Data Base. The Permit does not require Falcon to drill any wells during the one-year appraisal period, and establishes Falcon in a priority position for exercising future exploration rights within the lands covered by the Permit. The principal focus of the 7.5 million acre Karoo Basin Technical Cooperation Permit, located about 120 miles northeast of Cape Town, South Africa, is gas from fractured shale and sandstone in Permian age rocks. Nine wells have been drilled in the area and all have encountered gas shows. One of the wells, drilled in 1968, had an unstimulated flow rate of 1.84 million cubic feet of gas per day from fractures.