OREANDA-NEWS. June 20, 2011. The Serbian company NIS, along with TXM Oil and Gas Exploration Kft. (TXM), a subsidiary of the Canadian firm Falcon Oil & Gas Ltd., have signed an Agreement of Intent according to which NIS acquires a stake in the development of hydrocarbon-saturated sandstone deposits located at a depth of 2500 – 3500 metres below the Hungarian village of Algyo. The license for the deposit, which covers an area of 995km2 in the Mako region of Hungary, is currently owned by Falcon.

In accordance with the terms of the agreement, NIS must first compensate Falcon for the costs of the project up until now, as well as carrying out drilling and testing of three wells in the region by December 31, 2012. NIS stands to receive 50% of the extracted oil. Following this the costs of exploration and drilling will be shared proportionately by NIS and TXM, with TXM fulfilling the role of project operator.

NIS General Director Kirill Kravchenko declared: “the intention of NIS to participate in exploration projects in Hungary is another step that the company is taking in order to expand its activities outside Serbia. After Angola, Bosnia and Romania, Hungary is the fourth country in which the NIS has begun to carry out exploration and production projects. This joint project with TXM will contribute to the achievement of the strategic goal of NIS – to increase our reserves to 50 million tonnes and expand the volume of oil and gas production to the equivalent of 5 million tonnes of oil by the year 2020.”