Falcon Oil and Gas could spend up to $7million to buy out the 4% royalty interrest tied to its exploration permits in Australia.
The Irish firm is looking to reduce its royalty payments on the Beetaloo Basin after buying out Sweetpea’s stake in the seven million acre site, which is thought to contain up to 21million barrels of oil and 162 trillion cubic feet of gas.
Now the firm has agreed a deal with CR innovations to buy its 4% royalty interest on the exploration permits for the site, with an initial payment of $999,000 and a further $999,000 for the first 3% of the royalty.
A second payment, of $5million, will be made once a farm-out deal is completed for the project.
“This transaction should help to further progress our farm-out negotiations, which are at an advanced stage,” said Falcon chief executive Philip O’Quigley.
“Together with the significant seismic programme completed last year, this transaction further increases the value of our assets in the Northern Territory.”