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LONDON (Alliance News) - Falcon Oil and Gas PLC Tuesday said the Kalala S-1 well has been drilled and yielded "very encouraging" preliminary results with a net pay exceeding 150 metres.
Falcon, alongside its joint venture partners on the Beetaloo basin in Northern Australia, kick-started a three well drilling programme on the basin at the end of May.
The first well, Kalala S-1, has been drilled and the partners intersected a thick Middle Velkerri source rock sequence in the basin within a "highly prospective gas mature depth window," hitting a gross interval of shale gas over 500 metres with the net pay exceeding 150 metres.
The partners also discovered a number of prominent and good quality reservoir sections measuring between 50 to 80 metres in thickness. Those reservoir sections could be potential targets for further drilling in the future.
As planned, that well will now be cased and suspended while further technical evaaluation is undertaken.
The rig used for that well will now be moved to drill the second well, Amungee NW-1, which will be drilled next week.
"Preliminary evaluation of the Kalala S-1 well results represents an excellent start to Falcon's carried drilling and testing programme, providing new insights into the prospectivity of the primary target, the Middle Velkerri Formation," said Chief Executive Philip O'Quigley.
"This well represents the first step in unlocking the resource potential of our Beetaloo acreage. It will provide key input to the planning of multi-stage fracking and production testing in the scheduled vertical and horizontal exploration and appraisal wells," he added.
Falcon is fully carried for all drilling and evaluation costs on the basin in 2015, comprised of five wells, and the other partners are Origin Resources Ltd, the operator with a 35% stake, and Sasol Petroleum Australia Ltd which holds a further 35% stake.
Falcon shares were up 5.5% to 7.25 pence per share on Tuesday.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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