Falcon Oil & Gas Ltd. - Amungee NW-2H Well Update
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 |
* 1The 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
LimitedTamboran (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 CO2 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
statementsCertain 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.
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