RE: Cenkos take : 'Falcon Oil & Gas Ltd : A Gamechanger'3 Sep 2021 08:32
Establishing Commerciality – The key uncertainty to kick starting a shale gas industry in the Northern Territory is understanding whether the shales can release a commercial flow rate. An independent third-party report has concluded that the commerciality of the Beetaloo would be demonstrated by gas flows greater than 3MMscf/d from a 1,000m well, whilst a recent industry estimate suggest that gas flows greater than 2MMscf/d from a 1,000m well are required to demonstrate the commerciality of the Beetaloo. Either way, at 5.25.8MMscf/d, the PLT test result significantly exceeds this commercial threshold. In the same independent report, it was also concluded that it would take just a single well to achieve a commercial flow threshold (as success can be replicated across the uniform Beetaloo basin) to confirm the expectation that a large scale development is commercially viable. We expect the commercial potential of the Velkerri Shale to be further confirmed in late 2021 following the test results of the Tanumbirini-2H and 3H wells, 100km to the east of the Amungee NW-1H discovery. ? De-Risking the Velkerri Dry Gas Play – c100km to the east of the Amungee NW-1H discovery, Santos and Tamboran Resources have completed the drilling of the Tanumbirini-2H well to a total depth of 4,598m, including a 1,000m lateral section within the Middle Velkerri B shale. The results to date have been encouraging with the Tanumbirini-2H well encountering significant gas shows and pressures. Natural fractures, strong pressures and gas flows during drilling are typically indicative of a shale that will respond positively to fracture stimulation. The Easternwell 106 rig has now commenced drilling the Tanumbirini-3H well. Following the completion of Tanumbirini-3H, both wells will then be re-entered, fracture stimulated, and flow tested with results expected to be announced prior to the end of 2021. The aim of the drilling programme is to establish commercial flow rates from the Velkerri dry gas play – the same play where Origin/Falcon discovered 6.6Tcf of gross contingent 2C resources as a result of the successful Amungee NW-1H well 2016 extended production test (EPT). The 6.6Tcf of 2C resources only covers an area of 1,968km2, immediately surrounding the Amungee NW-1H well, with any success by Santos/Tamboran likely to extend the Velkerri B shale dry gas play fairway c100km to the east.
Falcon and Origin will now analyse the results to determine the next phase of work on the Middle Velkerri B Shale.
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