DUBLIN, IRELAND--(Marketwired - Sep 1, 2015) - Fal
Post# of 71
Posted On: 09/03/2015 12:01:40 PM
DUBLIN, IRELAND--(Marketwired - Sep 1, 2015) - Falcon (TSX VENTURE:FO)(FOG.L)(FAC) is pleased to announce that drilling operations have successfully concluded on the Kalala S-1 well. Results encountered are very encouraging, with the well drilled to a total depth ("TD"
of 2,619 meters.
Preliminary evaluation of the Kalala S-1 vertical exploration well confirms:
the presence of a thick Middle Velkerri source rock sequence in the Beetaloo Basin permit EP98, falling in a highly prospective gas mature depth window;
a gross interval of over 500 meters shale gas with net pay exceeding 150 meters;
the presence of moveable hydrocarbons in the form of elevated gas shows;
a number of prominent good quality sandy/silty reservoir sections measuring between 50 and 80 meters in thickness, each representing potential candidates for horizontal drilling;
excellent potential for gas mature, gas saturated and quartz rich source rocks that represent excellent exploration targets with material volumetric upside.
In addition to undertaking real time geochemical analysis of cuttings while drilling, we acquired extensive sidewall core and wireline data. The integration of these data will enable us to characterise the main physical properties of the penetrated rocks including rock type, total organic carbon (TOC), frackability (mineralogy, rock mechanics), petrophysics (porosity and permeability) and gas saturation.
As planned, the well will be cased to TD and suspended while this further technical evaluation is undertaken.
Rig 185 will now be mobilised to the second well location, the Amungee NW-1 well, and drilling there is expected to start next week.
Philip O'Quigley, CEO of Falcon commented:
"Preliminary evaluation of the Kalala S-1 well results represents an excellent start to Falcon's carried drilling and testing programme, providing new insights into the prospectivity of the primary target, the Middle Velkerri Formation. This well represents the first step in un-locking the resource potential of our Beetaloo acreage. It will provide key input to the planning of multi-stage fracking and production testing in the scheduled vertical and horizontal exploration and appraisal wells."
Background
On 2 May 2014, Falcon announced it had entered into a Farm-Out Agreement and Joint Operating Agreement with Origin and Sasol (collectively referred to herein as the "Farminees" with each farming into 35% of the Falcon's exploration permits in the Beetaloo Basin, Australia through its 98% subsidiary, Falcon Oil & Gas Australia Ltd. ("Falcon Australia".
Farminees will pay for the full cost of completing the first five wells estimated at A$64 million, and will fund any cost overruns, with work expected to be completed between 2015 and 2016.
Farminees to pay the full cost of the following two horizontally fracture stimulated wells, 90 day production tests and micro seismic data collection with a capped expenditure of A$53 million, any cost overrun funded by each party in proportion to their working interest. This work programme is expected to be undertaken in 2017.
Farminees to pay the full cost of the final two horizontally fracture stimulated wells and 90 day production tests capped at A$48 million, any cost overrun funded by each party in proportion to their working interest. This work programme is expected to be undertaken in 2018.
Farminees may reduce or surrender their interests back to Falcon Australia only after:
The drilling of the first five wells or
The drilling and testing of the next two horizontally fracture stimulated wells.
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 Aniversiteit Amsterdam, the Netherlands. He is a member of AAPG and EAGE.
of 2,619 meters. Preliminary evaluation of the Kalala S-1 vertical exploration well confirms:
the presence of a thick Middle Velkerri source rock sequence in the Beetaloo Basin permit EP98, falling in a highly prospective gas mature depth window;
a gross interval of over 500 meters shale gas with net pay exceeding 150 meters;
the presence of moveable hydrocarbons in the form of elevated gas shows;
a number of prominent good quality sandy/silty reservoir sections measuring between 50 and 80 meters in thickness, each representing potential candidates for horizontal drilling;
excellent potential for gas mature, gas saturated and quartz rich source rocks that represent excellent exploration targets with material volumetric upside.
In addition to undertaking real time geochemical analysis of cuttings while drilling, we acquired extensive sidewall core and wireline data. The integration of these data will enable us to characterise the main physical properties of the penetrated rocks including rock type, total organic carbon (TOC), frackability (mineralogy, rock mechanics), petrophysics (porosity and permeability) and gas saturation.
As planned, the well will be cased to TD and suspended while this further technical evaluation is undertaken.
Rig 185 will now be mobilised to the second well location, the Amungee NW-1 well, and drilling there is expected to start next week.
Philip O'Quigley, CEO of Falcon commented:
"Preliminary evaluation of the Kalala S-1 well results represents an excellent start to Falcon's carried drilling and testing programme, providing new insights into the prospectivity of the primary target, the Middle Velkerri Formation. This well represents the first step in un-locking the resource potential of our Beetaloo acreage. It will provide key input to the planning of multi-stage fracking and production testing in the scheduled vertical and horizontal exploration and appraisal wells."
Background
On 2 May 2014, Falcon announced it had entered into a Farm-Out Agreement and Joint Operating Agreement with Origin and Sasol (collectively referred to herein as the "Farminees"
with each farming into 35% of the Falcon's exploration permits in the Beetaloo Basin, Australia through its 98% subsidiary, Falcon Oil & Gas Australia Ltd. ("Falcon Australia". Farminees will pay for the full cost of completing the first five wells estimated at A$64 million, and will fund any cost overruns, with work expected to be completed between 2015 and 2016.
Farminees to pay the full cost of the following two horizontally fracture stimulated wells, 90 day production tests and micro seismic data collection with a capped expenditure of A$53 million, any cost overrun funded by each party in proportion to their working interest. This work programme is expected to be undertaken in 2017.
Farminees to pay the full cost of the final two horizontally fracture stimulated wells and 90 day production tests capped at A$48 million, any cost overrun funded by each party in proportion to their working interest. This work programme is expected to be undertaken in 2018.
Farminees may reduce or surrender their interests back to Falcon Australia only after:
The drilling of the first five wells or
The drilling and testing of the next two horizontally fracture stimulated wells.
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 Aniversiteit Amsterdam, the Netherlands. He is a member of AAPG and EAGE.
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