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Falcon says Aussie well update expected 'shortly'

The excitement will come when well results are revealed - but the financials reveal a well financed company.

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An update on the maiden well in Australia is expected shortly.

Falcon Oil & Gas (LON:FOG, CVE:FO) chief Philip O'Quigley said the company should be in a position to update the market on progress with its initial well in Australia “shortly”.

The update came as the explorer revealed itself to be in a strong financial position for a junior in this low price environment.

The interim results showed it was sitting on a cash pile of US$10.5mln. General and administrative expenses in the period have been cut by 44% to US$1.3mln.

The key landmark so far this year was start of drilling on Kalala S-1 – which is part of an initial three Australian wells in 2015 it is carried on by partners Origin Resources and Sasol.

This in turn is part of an uncapped programme of nine exploration and appraisal holes.

Kalala got underway on July 15 and should take 30-50 days to complete – meaning investors should hear news in the next fortnight.

The drilling is targeting the Middle Veklerri formation.

In the same announcement, the Falcon boss O'Quigley said the firm’s application for an exploration licence for its property in South Africa’s Karoo Basin should be approved by the end of the year.

As is common with oil and gas companies at this formative stage of their development, Falcon was loss-making in the six months to June 30. That deficit narrowed by US$800,000 to US$1.6mln.

“In this low oil price environment, Falcon continues to be differentiated by its strong cash position, strict cost management, a funded drilling programme and high quality assets; thus Falcon is well placed to deliver shareholder value," O'Quigley told investors.

Quick facts: Falcon Oil & Gas Ltd

Price: 12.4 GBX

AIM:FOG
Market: AIM
Market Cap: £121.75 m
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