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Tuesday, November 4, 2014
Falcon Oil & Gas has been notified by the Petroleum Agency of South Africa (PASA) that a decision has been taken to proceed with processing of the company’s application for a shale gas Exploration License in South Africa’s Karoo Basin.
PASA has requested Falcon to review and update its already drafted Environmental Management Program where necessary. In accordance with the South African Mineral and Petroleum Resources Development Act 2002, Falcon is required to notify and consult with communities and parties in respect of any such revisions. Falcon has been requested to complete this process by the end of February 2015.
Falcon was granted a Technical Cooperation Permit (TCP) in 2009 covering 7.5 million acres in the southern part of the Karoo Basin. The TCP gives Falcon an exclusive right to an Exploration License to find commercial hydrocarbon deposits over all or part of this area. The granting of the Exploration License was delayed to allow for appropriate regulation governing hydraulic fracturing to be put in place. The EIA has estimated that the Karoo Basin contains 390 Tcf of technically recoverable shale gas resources.
In December 2012, the company announced a cooperation agreement with Chevron Business Development South Africa Ltd. (Chevron). The agreement enables Falcon to work exclusively with Chevron for a period of five years in jointly obtaining Exploration Licenses.
In addition, Falcon revealed that the South African Department of Mineral Resources (DMR) informed members of South Africa’s parliament that the government is expected issue companies with licenses to explore for shale gas. Director General Thibedi Ramontja said that it is anticipated that technical regulations pertaining to hydraulic fracturing, would be gazetted by Government at the end of January 2015, after a final round of public consultation.
Philip O’Quigley, CEO of Falcon commented, “We are encouraged by these developments and will work to meet all the requirements set by the PASA. The 7.5 million acres in the Karoo Basin, for which Falcon is seeking an exploration license, 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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