Falcon Oil & Gas has elected not to exercise its option to acquire a 50% working interest in PetroHunter Energy Corporation’s 20,000 acre Buckskin Mesa project located in the Piceance Basin, Colorado, under the Purchase and Sale Agreement entered in August 2008 between Falcon and PetroHunter previously filed on SEDAR.

As initially disclosed in its press release dated August 25, 2008, Falcon acquired a 25% interest in five wells in the 20,000 acre Buckskin Mesa Project for consideration of US$7 million, and had an option to acquire an additional 50% working interest (37.5% net revenue interest) in the entire Buckskin Mesa Project, including the Five Wells. Falcon will retain its 25% interest in the Five Wells.

Exercise of the Option would have required Falcon to pay additional consideration of US$25 million in cash or securities convertible into Falcon common shares, or a combination thereof, and incur spending commitments of US$18 million pursuant to a drilling and development program.

Tags: Falcon Oil & Gas