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Falcon Oil & Gas Ltd. announces closing of Beetaloo Basin transaction
(TSXV Symbol: FO) DENVER, CO, Oct. 2 /CNW/ - Falcon Oil & Gas Ltd. (TSXV: FO) ("Falcon" or the "C...
About this update from Falcon Oil & Gas Ltd.
[{"type":"text","content":"\n\n\n\n(TSXV Symbol: FO)\n\n\nDENVER, CO, Oct. 2 /CNW/ - Falcon Oil & Gas Ltd. (TSXV: FO) ("Falcon" or\nthe "Company") today announced that the Company has closed the transaction to\nacquire its previously announced 50% working interest in PetroHunter Energy\nCorporation's ("PetroHunter") 7 million acre prospect in Northern Territory,\nAustralia (the "Beetaloo Basin"). As consideration for the Beetaloo Basin\ntransaction Falcon issued PetroHunter US$20 million of Falcon securities\nconvertible into common shares of Falcon stock on a one for one basis, in\naddition to the US $5 million paid by Falcon to PetroHunter on August 25,\n2008. The conversion of the convertible securities will result in the issuance\nof a maximum of 28,888,888 shares of Falcon at a minimum deemed value of $0.72\nper share.\n\n\nFalcon also today announced that it has loaned PetroHunter US$5 million.\nThe temporary bridge loan must be repaid within 120 days and bears interest at\na rate of 10% per annum. PetroHunter will not receive the proceeds of the loan\ndirectly; rather, the loan proceeds will be advanced directly to certain\ncreditors of PetroHunter who are due payment for services or other obligations\ndirectly related to the Beetaloo Basin and Buckskin Mesa properties. The loan\nis secured by a first mortgage in favour of Falcon on five wellbores owned by\nPetroHunter and by a pledge of US$7.5 million worth of the convertible\nsecurities issued to PetroHunter in connection with the Beetaloo Basin\ntransaction.\n\n\nUnder the terms of the loan, Falcon also negotiated an amendment to the\nBeetaloo Basin purchase agreement and an amendment to the escrow agreement\nassociated with the Initial Buckskin Mesa transaction. The amendment to the\nBeetaloo Basin purchase agreement reduces the maximum amount due to\nPetroHunter from US$7 million to US$3.5 million in the event that Falcon's\nshare price at the time of receipt for a (final) prospectus with respect to\nthe convertible securities is issued is less than $0.63 per share. The\namendment to the Initial Buckskin Mesa escrow agreement provides that the\nfinal decision on the initial testing program for the five initial Buckskin\nMesa wells requires mutual agreement between senior management of Falcon and\nPetroHunter.\n\n\nFalcon and PetroHunter continue to w...