TIDMFOG
Falcon Oil & Gas Ltd.
("Falcon" or "Company")
Amungee NW-2H Well Update
22 June 2023 -- Falcon Oil & Gas Ltd. (TSXV: FO, AIM: FOG)
provides the following update on operations at the Amungee NW-2H
("A2H") in the Beetaloo Sub-Basin, Northern Territory, Australia
with Falcon Oil & Gas Australia Limited's joint venture
partner, Tamboran (B2) Pty Limited ("Tamboran"), collectively the
joint venture ("JV").
Background
In December 2022 the A2H well was drilled to a total depth (TD)
of 3,883 metres, including a 1,275-metre horizontal section within
the Amungee Member B Shale, with a 25-stage stimulation programme
completed across a 1,020 metre horizontal section in March 2023.
Operations to install production tubing were completed in
late-April 2023 and the well was subsequently re-opened in
preparation for production flow testing. This is only the sixth
well drilled and fracture stimulated in the Beetaloo Sub-basin to
date.
Update on Flow Testing
-- The A2H well achieved gas breakthrough, however, modelling and
independent third-party analysis from a US laboratory identified a
potential skin inhibiting the flow of gas from the stimulated shale.
Despite this, the gas has flowed at an average rate of 0.97 mmcf/d over
50 days with circa 10% of the water used in the simulation programme
recovered to date, well below other wells in the basin.
-- The JV believe flows from the well are yet to establish an uninhibited
30-day initial production rate.
-- The well is currently producing approximately 0.83 mmcf/d and water
recovery is approximately 50 bbl/d with cumulative gas production and
water recovery of 52.37 mmcf and 17,879 bbl, respectively.
-- The hydrocarbon phases recovered are dry gas with 90.4% methane and 2.9%
ethane.
-- The JV believes the results are not indicative of the underlying
production potential of the Amungee Member B Shale as the Amungee NW-1H
well ("A1H") achieved flow rates of >5 mmcf/d over a normalised 1,000
metres from the same well pad in 2021. Comparative details are included
in the table below:
A2H A1H (full)* A1H (flow)*
-------------------------- ------ ---------------- ---------------
Stimulated Lat.
Length (m) 1020 682 162
-------------------------- ------ ---------------- ---------------
Stages 25 11 4
-------------------------- ------ ---------------- ---------------
Proppant Volume
(kbbls) 169 67 31
-------------------------- ------ ---------------- ---------------
Proppant Tonnage
(million pounds) 7.1 2.5 1.5
-------------------------- ------ ---------------- ---------------
* (1) The A1H well was stimulated over a 682-metre horizontal
section in the Mid Velkerri "B Shale". Following testing, the
flow was determined to be flowing over four stages (stage 8
-- 11). A1H (flow) shows flow across this smaller length. A1H
(full) is over 1,000 metre)
---------------------------------------------------------------------
-- Results from the laboratory will continue to test fluid samples to
determine how the JV can potentially clean-up potential skin within the
A2H well and apply learnings going forward on future completion
operations. Updates to the market will be provided as further results and
conclusions become available.
-- Analysis is also being conducted to compare the completion and
stimulation design of the A2H well and the A1H fracture stimulation in
2016, which had a production logging test completed in 2021, to establish
the optimum approach to future completion and fracture stimulation
designs.
Forward Work Programme
The JV partners will continue to focus on interpreting the
results to date and completing the test and analysis work, to
determine if there is clean-up work that can be carried out on the
A2H well in Q3 2023.
The JV is also considering undertaking a two well drilling
programme in the second half of this year which, once formally
approved by the JV, will include drilling a well at Shenandoah
South ("SS1H") in exploration permit 117, 60 kilometres south of
A2H (from the same pad Kyalla 117 N2-1H ST2 was drilled) in Q3 2023
targeting deeper acreage in the JV exploration permits followed by
drilling Amungee 3H ("A3H"), a well in close proximity to the
existing two Amungee wells.
Further details will be announced to the market once the JV has
formally approved the work program.
Philip O'Quigley, Falcon's CEO, commented:
"Initial flow rates demonstrated from the A2H well to date do
not reflect the true deliverability of the shale in the Amungee
region. Being the sixth well drilled and stimulated within the
Amungee member within the Beetaloo Sub-basin, we continue to learn
from how the shale is stimulated and performs under varying
conditions. Further analysis of all available data together with
any clean-up work will hopefully yield more positive interpretation
of the results obtained to date.
We look forward to being able to use all the learnings from this
A2H well and other work conducted in the Beetaloo Sub-basin to date
in order to allow the JV to design a modified drilling and
completion programme for the proposed upcoming two-well drilling
program which hopefully will deliver a successful outcome for our
shareholders.
Falcon remains in a very strong financial position with circa
US$16 million in cash and remains carried for costs at this
time."
This announcement contains inside information.
Ends.
CONTACT DETAILS:
Falcon Oil & Gas Ltd. +353 1 676 8702
Philip O'Quigley, CEO +353 87 814 7042
Anne Flynn, CFO +353 1 676 9162
Cenkos Securities plc (NOMAD &
Broker)
Neil McDonald / Derrick Lee +44 131 220 9771
This announcement has been reviewed by Dr. Gábor Bada, Falcon
Oil & Gas Ltd's Head of Technical Operations. Dr. Bada obtained
his geology degree at the Eötvös L. University in Budapest, Hungary
and his PhD at the Vrije Universiteit Amsterdam, the Netherlands.
He is a member of AAPG.
About Falcon Oil & Gas Ltd.
Falcon Oil & Gas Ltd is an international oil & gas
company engaged in the exploration and development of
unconventional oil and gas assets, with the current portfolio
focused in Australia, South Africa and Hungary. Falcon Oil &
Gas Ltd is incorporated in British Columbia, Canada and
headquartered in Dublin, Ireland with a technical team based in
Budapest, Hungary.
Falcon Oil & Gas Australia Limited is a c. 98% subsidiary of
Falcon Oil & Gas Ltd.
For further information on Falcon Oil & Gas Ltd. please
visit www.falconoilandgas.com
About Tamboran B2 Pty Limited
Tamboran (B1) Pty Limited ("Tamboran B1") is the 100% holder of
Tamboran B2 Pty Limited, with Tamboran B1 being a 50:50 joint
venture between Tamboran Resources Limited and Daly Waters Energy,
LP (Sheffield).
Tamboran Resources Limited, is a natural gas company listed on
the ASX (TBN) and U.S. OTC markets (TBNNY). Tamboran is focused on
playing a constructive role in the global energy transition towards
a lower carbon future, by developing the significant low CO(2) gas
resource within the Beetaloo Basin through cutting-edge drilling
and completion design technology as well as management's experience
that in successfully commercialising unconventional shale in North
America.
Bryan Sheffield of Daly Waters Energy, LP is a highly successful
investor and has made significant returns in the US unconventional
energy sector in the past. He was Founder of Parsley Energy Inc.
("PE"), an independent unconventional oil and gas producer in the
Permian Basin, Texas and previously served as its Chairman and CEO.
PE was acquired for over US$7 billion by Pioneer Natural Resources
Company ("Pioneer"), itself a leading independent oil and gas
company and with the PE acquisition became a Permian pure play
company. Pioneer has a current market capitalisation of c. US$60
billion.
Glossary
bbl Barrels
------ --------------------------
bbl/d Barrels per day
------ --------------------------
Kbbl Kilobarrel
------ --------------------------
M Metres
------ --------------------------
Mmcf Million cubic feet
------ --------------------------
Mmcf/d Million cubic feet per day
------ --------------------------
Advisory regarding forward looking statements
Certain information in this press release may constitute
forward-looking information. Any statements that are contained in
this news release that are not statements of historical fact may be
deemed to be forward-looking information. Forward-looking
information typically contains statements with words such as "may",
"will", "should", "expect", "intend", "plan", "anticipate",
"believe", "estimate", "projects", "dependent", "consider"
"potential", "scheduled", "forecast", "outlook", "budget", "hope",
"suggest", "support" "planned", "approximately", "potential" or the
negative of those terms or similar words suggesting future
outcomes. In particular, forward-looking information in this press
release includes, but is not limited to, information relating to
the completion of the stimulation programme, the execution of the
fracture stimulation of the A2H well, the prospectivity of the
Amungee Member/Middle Velkerri play and the JV believing the
results are not indicative of the underlying production potential
of the Amungee Member B Shale, the JV working with laboratories on
fluid samples to determine how the JV can potentially clean-up
potential skin with the A2H well and apply learnings going forward,
analysis to compare the completion and stimulation design of the
A2H well and the A1H fracture stimulation in 2016, to establish the
optimum approach to future completion and fracture stimulation
designs, JV believing flows
from the well are yet to establish an uninhibited 30-day initial
production rate, the JV considering a two well drilling programme
at Shenandoah South and Amungee 3. This information is based on
current expectations that are subject to significant risks and
uncertainties that are difficult to predict. The risks, assumptions
and other factors that could influence actual results include risks
associated with fluctuations in market prices for shale gas; risks
related to the exploration, development and production of shale gas
reserves; general economic, market and business conditions;
substantial capital requirements; uncertainties inherent in
estimating quantities of reserves and resources; extent of, and
cost of compliance with, government laws and regulations and the
effect of changes in such laws and regulations; the need to obtain
regulatory approvals before development commences; environmental
risks and hazards and the cost of compliance with environmental
regulations; aboriginal claims; inherent risks and hazards with
operations such as mechanical or pipe failure, cratering and other
dangerous conditions; potential cost overruns, drilling wells is
speculative, often involving significant costs that may be more
than estimated and may not result in any discoveries; variations in
foreign exchange rates; competition for capital, equipment, new
leases, pipeline capacity and skilled personnel; the failure of the
holder of licenses, leases and permits to meet requirements of
such; changes in royalty regimes; failure to accurately estimate
abandonment and reclamation costs; inaccurate estimates and
assumptions by management and their joint venture partners;
effectiveness of internal controls; the potential lack of available
drilling equipment; failure to obtain or keep key personnel; title
deficiencies; geo-political risks; and risk of litigation.
Readers are cautioned that the foregoing list of important
factors is not exhaustive and that these factors and risks are
difficult to predict. Actual results might differ materially from
results suggested in any forward-looking statements. Falcon assumes
no obligation to update the forward-looking statements, or to
update the reasons why actual results could differ from those
reflected in the forward looking-statements unless and until
required by securities laws applicable to Falcon. Additional
information identifying risks and uncertainties is contained in
Falcon's filings with the Canadian securities regulators, which
filings are available at www.sedar.com, including under "Risk
Factors" in the Annual Information Form.
Any references in this news release to initial production rates
are useful in confirming the presence of hydrocarbons; however,
such rates are not determinative of the rates at which such wells
will continue production and are not necessarily indicative of
long-term performance or ultimate recovery. Readers are cautioned
not to place reliance on such rates in calculating the aggregate
production for Falcon. Such rates are based on field estimates and
may be based on limited data available at this time.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
(END) Dow Jones Newswires
June 22, 2023 02:00 ET (06:00 GMT)
Copyright (c) 2023 Dow Jones & Company, Inc.
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