By OGJ editors
HOUSTON, June 9 – Nafta Industrija Srbije jsc Novi Sad, 51% owned by Russia’s Gazprom Neft, will drill three wells to Tertiary formations in Hungary’s Mako Trough by the end of 2012 under an agreement with Falcon Oil & Gas Ltd., Denver.
NIS is to acquire an interest from Falcon’s Hungary subsidiary TXM Oil & Gas Exploration Kft in Falcon’s 955 sq km Mako production license from a depth of 2,300 m down to the base of the Algyo formation. TXM will retain all rights deeper than the base of the Algyo formation such as the Szolnok and Endrod formations.
The Algyo formation is a prospective, pervasive, hydrocarbon-bearing sandstone found predominantly between 2,500 and 3,500 m below surface. A letter of intent calls for NIS to pay TXM $1.5 million upon signing a participation agreement. Each well is to test an independent Algyo prospect.
NIS will earn a 50% interest in production from each prospect if the discovery well is tied in and placed on production at its expense. After drilling the three wells, NIS has the right to acquire a 50% interest in production from the entire agreement area by paying TXM a further $2.75 million. If NIS does not fulfill its drilling obligations, TXM will retain 100% interest in the agreement area.
If the NIS earn-in is completed, NIS and TXM will share future exploration, appraisal, and development costs and production in the agreement area in accordance with their participating interests held under a joint operating agreement. TXM will be the operator under the participation and joint operating agreements.
TXM said NIS is an active player in Serbia and has a growing presence in the region, including exploration in the same type of targets addressed in the agreement, to which North American technology will be applied in Hungary. NIS said the joint project with TXM will bring NIS closer to achieving the strategic goal of hiking reserves to 50 million tons and production of oil and gas to 5 million tons of oil equivalent in 2020.
NIS noted that Serbia has a huge potential of shale gas exploration and that cooperation with Falcon in Hungary will allow it to learn and prepare its geologists and engineers for further deep exploration in Serbia.
NIS to seek Tertiary gas in Hungary Mako Trough
By OGJ editors