(Sharecast News) - Falcon Oil announced on Wednesday that the Shenandoah South 1H (SS1H) pilot hole, located in exploration permit 117 in the Beetaloo Sub-basin, had reached a total vertical depth (TVD) of 3,300 metres.
The AIM-traded firm said the hole intersects around 90 metres of the Amungee Member B-shale, featuring strong dry gas shows.
It said the 90-metre intersection with the Amungee Member B-shale was a record for the thickest section of the kind seen to date in the Beetaloo Sub-basin depocenter.
Moreover, the Helmerich & Payne super spec 'FlexRig' Flex 3 rig that was used for drilling achieved the TVD in just 21.5 days, drilling at an average rate of 153 metres per day.
That, the board said, established a new speed record for wells drilled below 3,000 metres in the Beetaloo Sub-basin.
Preliminary logging data of the Amungee Member B-shale indicated potentially higher levels of porosity and gas saturation compared to surrounding offset wells.
The preliminary results were a positive indication of the commercial viability of gas extraction from the formation.
Initial evaluations confirmed reservoir continuity of the Amungee Member B-shale over an expanse of 150 kilometres between the Amungee NW-2H and Beetaloo W-1 wells.
That also covered a target development area of around one million acres, where the shale depth surpasses 2,700 metres.
Falcon Oil & Gas Australia's joint venture partner, Tamboran, was now set to commence a 1,000-metre horizontal section within the shale formation.
That would precede a stimulation program consisting of up to 10 stages over a 500-metre section, scheduled for the fourth quarter of 2023.
"Reaching TVD of 3,300 metres on the SS1H well in just 21.5 days is a great first step in the current year's work programme," said chief executive officer Philip O'Quigley.
"The preliminary results to date are all very promising as we commence the horizontal section before moving to the stimulation programme in the fourth quarter of 2023.
"We will continue to update the market on progress made."
At 0808 BST, shares in Falcon Oil & Gas were up 1.87% at 6.82p.
Reporting by Josh White for Sharecast.com.
Falcon Oil (FOG)