Falcon Oil Share News (FOG)

(Sharecast News) - Falcon Oil & Gas detailed its stage three work programme in the Beetaloo Sub-Basin of Australia's Northern Territory on Tuesday, with its joint venture partner Origin Energy B2 - a wholly-owned subsidiary of Origin Energy.
The AIM-traded firm said 2022 would see Falcon and Origin progressing to the third stage of work under the restated farm-out agreement, which would include the drilling, fracture stimulation and extended production test of two horizontal wells.

It said the programme would include the acquisition of 40 square kilometres of 3D seismic survey on the Amungee NW-1H well lease area, the drilling of two more-than-2,000-metre horizontal wells on the Amungee NW-1H pad, targeting the Amungee Member B Shale, and the fracture stimulation of both horizontal wells.

The programme would also involve extended production testing of between 90 and 180 days on each well, follow-up core and log analysis of the "very encouraging" preliminary evaluation of the 2021 Velkerri 76 well results, and further evaluation of the results of the Kyalla 117 N2-1H well to better understand the issues encountered during testing in 2021.

Falcon said the objectives of the work stage would be to use the acquired data to plan the drilling of the 2022 wells and any future horizontal wells in the area, optimise horizontal well trajectories, and assess the viability of future 3D surveys in the basin.

The two horizontal wells were being designed to demonstrate scalability of the Amungee NW-1H results over longer laterals, and establish operational and cost efficiencies by drilling more than one well from the same pad, the board said.

"This is an extremely important period for the Beetaloo Sub-Basin and we are delighted to have confirmed a high-impact, extensive and really exciting work programme for the joint venture," said chief executive officer Philip O'Quigley.

"We will be focusing our attention on the Amungee Member B Shale, following the 2021 results at Amungee NW-1H, which suggested a normalised gas flow rate equivalent to around 5,000 million standard cubic feet per day per 1,000 metres of horizontal section; a potentially commercial flow rate.

"Falcon remains largely - circa 75% - carried for 2022, with the balance of costs being funded from existing resources."

O'Quigley said positive results here would provide a further line of sight to the commercialisation of the Beetaloo, and could lead to a pilot development program in 2023.

"Confirmation on the commencement of the stage three work programme will be provided in the coming months as scheduling is refined.

"In addition to our own acreage, we also look forward to the gas flow results from the current testing of two wells in the neighbouring Santos-operated EP 161, also targeting the Amungee Member dry gas play.

"We expect these results to be communicated to the market shortly and believe that these will prove to be another important moment for the nationally significant Beetaloo Sub-Basin."

At 1128 GMT, shares in Falcon Oil & Gas were up 5.31% at 11.11p.