Falcon Oil & Gas Ltd. is a global exploration company that has acquired early stage unconventional acreage in two major basins, Beetaloo in Australia and the Karoo in South Africa as well as acreage in Hungary.
In all, it has amassed almost 15m acres. Now it is delivering on the company’s new strategy of bringing in the majors and super majors in the form of Hess in Australia, Chevron in South Africa and Gazprom Neft in Hungary. The deals already executed by Falcon, which are a mix of farm-out, cooperation and oil production services Agreements, will ensure that the company can leverage off world class expertise in unconventional oil and gas exploration. More importantly, the structure of each of the deals will see Falcon fully carried through many years of exploration which will include the drilling of a large number of wells.
Falcon Oil & Gas to draw plenty of attention for AIM investors
Investors keen to track John Craven as the former Cove Energy chief plots his next big move have two new vehicles to chew over.
Cove was one of the junior market’s success stories of recent years and for many investors that bought into the stock there were handsome gains.
Cove bought an 8.5% stake in a prospective offshore licence in Mozambique for a paltry £3mln back in 2009, ahead of a drill programme that a few months later uncovered what would become a major LNG project.
Craven’s firm was then bought out for US$1.2bn by an arm of Thailand’s state oil company PTT following a bid battle with Anglo-Dutch giant Shell.
While Discover Exploration, which has already picked up acreage in the Mozambique channel, appears to be the obvious candidate for the ‘Cove mark II’ tag, closer inspection of Falcon’s strategy reveals much of the Cove blueprint.
The plan for Dublin-headquartered Falcon is to secure large acreage positions that are very prospective, this time for unconventional hydrocarbons, and then bring in major partners to take projects forward.
In total, Falcon has a portfolio of 14.75mln acres in what it considers to be three of the most prospective unconventional oil and gas basins in the world.
And it plans to use a portion of the £16.9mln (US$25mln) it is raising with its float onto AIM and Ireland’s stock exchange to enable strategic acquisitions.
Prior to the London and Dublin placing the stock, presently quoted on the Toronto venture exchange, was worth 24.5 cents a share or C$170mln.
Chief executive Philip O'Quigley, who last April left his role as Providence Resources’ chief financial officer to take the Falcon job, says it is now the right time to bring the company to the London and Irish markets.
"With our established portfolio in Australia, South Africa and Hungary, we are differentiated from our peers in the unconventional sector,” O'Quigley said.
“We believe that the admission will be an important step in the group's continued growth, allowing the company access to additional sources of finance, as we and our partners strive to realise the value proposition from the large resource potential contained within our asset portfolio."
Falcon’s first day’s trading on AIM is pencilled in for Thursday March 28.
Earlier this week it was reported that Discover Exploration was looking to raise US$50mln from City institutions after it secured around 18,000 square kilometres of exploration ground off the East African island state of Comoros – which is located between Mozambique and Madagascar, and to the south-west of the Seychelles.
The acreage is just beyond the boundaries of the Mozambican territory where Cove’s partner Andarko struck its major gas discovery, though in exploration terms the prospects are far less advanced.