In Europe unconventional gas becomes profitable ar around $9 (according to this article). In North-America today it is $4.80. These numbers say that in addition to a higher price for gas in Europe, development costs are also higher.

The lack of a developed base of junior explorers in Europe is what gives Falcon an edge.

Falcon has been able to capture the largest percentage of an entire unconventional gas basin, and has been able to retain an overall ownership of some 50% counting both the JV and 100% owned land. Anywhere else a land position of this size would be held by many companies. Here is just 3, and Falcon is the largest land owner in the Mako basin. No junior would have been able to do that in North-America.

Major companies are really very lousy grass-root exploreres. They excell in the mid- and -end games. In today's world, majors seek juniors like Falcon to joint venture lands. It is really quite simple. The major is driven by the elephant-sized potential of a field, and is un-able to get past some obstacles to carry out the preliminary work necessary to enhance a project to the point were the major can look at it.

It is at this preliminary grass-roots stage where the junior like Falcon comes in. Falcon can do, and did at Mako, the preliminary high-risk work, and the major can then come in and do the expensive proofing and development part. It is a simbiotic relationship, never understood by some people that invested in this stock. And let me repeat one more time: no, Exxon is not about to quit. Phase two is a reality that will bocome apparet to all in the next year.

The game is far from over, it is developing, and the way in which it is happening, along with the test results at F1, fall in the ralm of normal and not-unusual for this type of exploration.

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