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Falcon Oil & Gas takes significant set towards gaining South Africa shale exploration licence

Falcon Oil & Gas described as “encouraging” South Africa’s decision to process its application for a shale gas exploration licence in the country’s highly prospective Karoo Basin.

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Falcon Oil & Gas (LON:FOG, CVE:FO) described as “encouraging” South Africa’s decision to process its application for a shale gas exploration licence in the country’s highly prospective Karoo Basin.

The Petroleum Agency of South Africa (PASA), which will update its guidelines on fracking early next year, has asked Falcon to “review and update” its already-drafted environmental management programme.

The UK and Canada-listed explorer was granted a technical cooperation permit covering 7.5mln acres of the Karoo in 2009.

The award of a permit was delayed to allow regulations governing fracking to be put in place.

Falcon has a cooperation agreement with Chevron in South Africa.

The potential of the Karoo is underscored by a US Energy Information Administration report that estimates it contains 390trln cubic feet of technically recoverable shale gas.

Falcon chief executive Philip O'Quigley said: "We are encouraged by these developments and will work to meet all the requirements set by the PASA.

“The 7.5mln acres in the Karoo Basin, for which Falcon is seeking an exploration licence, are geologically prospective with the Whitehill shale believed to be thick, organically rich and thermally mature.

“We will update shareholders as and when appropriate."

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Price: 12.4 GBX

AIM:FOG
Market: AIM
Market Cap: £121.75 m
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