OREANDA-NEWS. The drilling of exploration well Kutvolgy-1 at Algyo field (the Mako concession block) in southeastern Hungary began in June. The operations fall under the agreement signed between NIS and Falcon Oil & Gas on January 14, 2013 for the joint exploration of gas fields.

As planned, the drilling will last forty days, and the well depth will reach 3300 meters. The German company DrillTec is the drilling contractor. Upon completion of the drilling, the well will be tested to determine the field's gas potential.

The Kutvolgy-1 well is the first of three exploration wells scheduled to be drilled under the NIS-Falcon Oil & Gas agreement. According to the agreement, NIS will be paying for the exploration work. If commercial hydrocarbon reserves are discovered, the profit from the sale of those reserves will be shared equally between NIS and Falcon Oil & Gas.

The subsidiary Pannon Naftagas Kft represents NIS's interest in Hungary. Pannon Naftagas Kft is a partner of both Falcon Oil & Gas and the Austrian company RAG. NIS and RAG are jointly running exploration prohects in the Kelebija and Kiskunhalas blocks.