Falcon chief hails Aussie drill result as 'excellent start'

Falcon Oil & Gas (LON:FOG, CVE: FO) chief Philip O'Quigley hailed as an “excellent start” the drill results from its first well in Australia’s Beetaloo Basin.

Kalala S-1 intercepted more than 500 metres of shale gas with a net pay (the potentially economic portion) of 150 metres.

Origin Energy, the operator, also identified a number of “good quality” sand and, or silty reservoirs of between 50 and 80 metres that are candidates for horizontal drilling.

The exploration well, the first of up to nine, was targeting the highly prospective Middle Velkerri source rock sequence.

Origin and South Africa’s Sasol each own 35% of the Beetaloo property, with Falcon holding the remaining stake.

The latter is fully carried on an ambitious work programme that includes five wells this year and next worth around A$64mln.

Another four horizontally fracked wells could be sunk in 2017 and 2018 at a cost of more than A$100mln.

"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,” O'Quigley told investors.

“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."

Ian Lyall