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Falcon Oil & Gas kicks off new Beetaloo shale well drilling

This "exciting development" marks the start of the Stage 2 drill programme, as defined in Falcon's farm-out deal with Origin Energy.

Falcon Oil & Gas Ltd - Falcon Oil & Gas kicks off new Beetaloo shale well drilling
The programme comprises a 1,750 metre vertical pilot hole and a 1,000 metre horizontal well

Falcon Oil & Gas Ltd’s (LON:FOG) (CVE:FO) (OTCMKTS:FOLG) exciting Australian shale gas project is now back actively underway, with the start of new drilling in the Beetaloo basin.

The Kyalla 117 N2-1 has now been spudded, the company revealed in a statement.

It is the first well in the ‘Stage 2’ drill programme at Beetaloo. The well is located some 32 kilometres from the prior Beetaloo W-1 well and it is targeting the shale liquids rich gas play.

READ: Falcon Oil & Gas highlights ‘strong financial position’

First, a vertical pilot well is being drilled down to around 1,750 metres into the Kyalla formation. A horizontal section of around 1,000 metres will then be drilled. The horizontal well will be completed and will undergo a production test.

“The spudding of the Kyalla 117 N2-1 appraisal well is an exciting development for Falcon and marks the re-commencement of the drilling programme with our JV partner,” said Philip O’Quigley, Falcon chief executive.

“We look forward to updating the market as soon as results become available.”

Origin Energy, the operator and Falcon’s partner, aims to assess hydrocarbon maturity, saturation and reservoir quality.

The well programme is expected to provide further information on the areal distribution of the Kyalla Formation. It will collect data for subsequent drilling operations.

Origin previously committed to covering up to A$113mln of Falcon's costs for Stage 2 and Stage 3 drill programmes, and, earlier this Falcon guided that it expected its share of costs would amount to around US$5.5mln (not including contingencies).

Financial results released in August confirmed a “strong financial position” with the explorer holding US$14.5mln of cash at the end of June.

Falcon retains a 30% interest in the Beetaloo projects.

Quick facts: Falcon Oil & Gas Ltd

Price: 7.4 GBX

Market: AIM
Market Cap: £72.66 m

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