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Falcon Oil chief O’Quigley says it was a busy first half

By Jamie Ashcroft August 29 2014, 8:41am

Falcon Oil & Gas (LON:FOG) chief executive Philip O’Quigley says it has already been a busy year for the company.

Thus far the highlight for the company, which released its interim results statement today (Friday), has been the securing of new partners for its Beetaloo basin shale play, in Australia.

A deal was agreed in May with local operator Origin Energy and South African gas-to-liquids specialist Sasol – and last week the transactions completed.

Upfront Falcon receives A$20mln of cash, though more significantly the new partners have committed to funding a nine well work programme. They will spend A$64mln on the first phase of five wells, while the next phase of horizontal drilling will cost around A$100mln.

Drilling is expected to get underway by mid-2015.

Elsewhere, Falcon reveals the first half of this year saw Positive developments toward the processing of shale gas exploration rights in South Africa, which it expects to receive by year end.

And in Hungary drilling continues on a programme with Gazprom’s Nafta Industrija Srbije unit – this work is carried by the larger partner.

Falcon described its financial position as ‘strong’, ending the six months to June 30 with cash of US$5.5mln. It subsequently received AS$20mln from the Beetaloo deal last week.

The company said it continues to focus on strict cost management and it remains debt free.

During the first half the pre-revenue explorer made a US$2.4mln loss, down from US$6.6mln in the corresponding period of last year.

In this morning’s statement O’Quigley said: "2014 has been a busy year thus far for the group with the execution and completion of the Agreements with Origin and Sasol of our Beetaloo permits in the Northern Territory, Australia.

“Together with the A$20 million cash received, the deal is worth up to approximately A$200 million to Falcon. I look forward to updating the market and making further announcements on the group's progress throughout the remainder of the year."