News Release - Falcon Oil & Gas Ltd. Stellar IP30 Day Flow Rates Advances the Beetaloo to Pilot Development
posted on
Feb 26, 2024 07:38AM
Developing large acreage positions of unconventional and conventional oil and gas resources
2024-02-26 02:00 ET - News Release
Falcon Oil & Gas Ltd.
(“Falcon” or “Company”)
Stellar IP30 Day Flow Rates Advances the Beetaloo to Pilot Development
26 February 2024 – Falcon Oil & Gas Ltd. (TSXV: FO, AIM: FOG) is pleased to announce that the Shenandoah South 1H (SS-1H) well in EP117 achieved commercial IP30 flow rate of 3.2 MMcf/d (normalised to 6.4 MMcf/d over 1,000 metres), significantly higher than pre-drill expectations.
Highlights are as follows:
Philip O’Quigley, CEO of Falcon commented:
“The IP30 flow rate announced today of 3.2 MMcf/d, normalised to 6.4 MMcf/d over 1,000 metres, are truly stellar and mark a major turning point in the Beetaloo Basin. Not only did the results exceed Falcon’s pre-drill commercial threshold of a normalised flow rate of 3 MMcf/d by more than 100% but the geological properties evidenced in this part of the Basin, including reservoir pressure, effective porosity and gas-in-place all point towards the significant resource potential of the Basin. We will continue flow testing the well for the next 60 days to achieve an IP90 flow rate which will better determine what that resource potential is.
We can now look forward with confidence to commencing the proposed 40 MMcf/d pilot development project which will start with the drilling of the first of six 10,000 ft development wells in Q2 2024, subject to stakeholder approval and funding, and look forward to updating the market as those plans begin to materialise.”
Reminder: Investor Meet today
Philip O’Quigley, Falcon’s CEO, will conduct a Q&A via the Investor Meet Company platform today 26 February 2024 at 4:00pm (London time).
The event is open to all existing and potential shareholders. Questions can be submitted at any time during the live presentation.
Investors can sign up to Investor Meet Company for free and add to meet Falcon Oil & Gas Ltd. via:
https://www.investormeetcompany.com/falcon-oil-gas-ltd/register-investor
Investors who already follow Falcon Oil & Gas Ltd. on the Investor Meet Company platform will automatically be invited.
Shenandoah South 1H flow results
The SS-1H well in permit EP 117 successfully achieved IP30 flow rates following the 10-stage stimulation program within the bottom 501 metres (1,644 ft) of the 1,020-metre (3,346 ft) lateral section in the Amungee Member B- Shale (depth of c. 9,957ft). The fracture stages had an average interval spacing of 50 metre (164ft) and the average proppant concentrations of 2,212 lbs/ft across the 10 main stages with a total of over 3.5 million pounds of sand placed.
Testing was carried out following the installation of production tubing and a three-week soaking period to allow for water used in the stimulation process to be absorbed by the shale. The soaking aims to increase the relative permeability to gas of the formation and enhance production performance.
During the initial draw down period from 25 January to 08 February (13.3 days) the choke was opened from 16/64 to 40/64 over staged intervals resulting in gas rates from 12.9 MMcf/d to 3.0 MMcf/d, with flowing wellhead pressures drawn down from 4,611 to 792 psi. During the subsequent flowing period from 08 Feb – 24 Feb (16.7 days) the choke was opened up to 43/64 at the beginning of the period, resulting in gas rates from 3.3 to 2.9 MMcf/d, with an average of 3.0 MMcf/d with flowing wellhead pressures drawn down from 792 to 578 psi. Total cumulative gas production during the IP30 test was 92.2 MMcf.
The well achieved an IP30 flow rate of 3.2 MMcf/d over the 501 metres (1,644 ft), normalised to 6.4 MMcf/d over 1,000 metres (3,481 ft), and 19.5 MMcf/d over 3,048 metres (10,000 ft) significantly exceeding Falcon’s normalised pre-drill expectations and Falcon’s estimated Beetaloo Basin commerciality threshold.
Table 1: Breakdown of the SS-1H IP30 flow result
SS-1H Rates (MMcf/d) |
Actual (501m; 1,644 ft) |
Normalized (1,000m; 3,281 ft) |
Normalized (3,048m; 10,000 ft) |
Average IP30 flow rate | 3.2 | 6.4 | 19.5 |
Peak rate | 12.9 | N/A | N/A |
IP30 exit rate | 2.9 | 5.8 | 18.3 |
Source: Company Data
The SS-1H has demonstrated that the geological rock properties, indicative of favourable well performance, met or exceed the US Marcellus shale (incl. reservoir pressure, effective porosity and gas in place). The analysis of the gas recovered at SS-1H confirms that it is Dry Gas with the following composition (mole %): Methane 91.7, Ethane 2.8 and CO2 3.4. Flow testing has demonstrated pore pressure gradient of ~0.6 psi/ft, resulting in higher reservoir pressure at Shenandoah compared to all other Basin wells.
The SS-1H IP30 flow rate delivered the highest normalised rates achieved in the Beetaloo Basin to date, exceeding the previous normalised IP30 record achieved by the Tanumbirini 3H well in the Santos-operated EP 161 acreage in 2022. The SS-1H result continues to demonstrate that the deepest regions of the basin have the most consistent geology and deliver the highest flow rates and recoverable volumes. The SS-1H IP30 flow rate extrapolated over 10,000ft (3,048m) of 19.5 MMcf/d compares very favourably with the average US Marcellus Type Well.
Pilot Development Program
The results from the SS-1H well give the Beetaloo JV confidence to progress to the proposed 40 MMcf/d Pilot Project 9 MMcf/d net Falcon) in the Shenandoah South region. The JV is targeting first production from the project in H1 2026, which is expected to deliver volumes into the Northern Territory gas market over a 10-year plateau period, subject to completion of a binding Gas Sales Agreement, funding and key stakeholder approvals.
The program is expected to include six development wells drilled to 10,000 feet to achieve plateau production, the construction of the 40 MMcf/d Sturt Plateau Compression Facility (SPCF) and the 35-kilometre Sturt Plateau Pipeline (SPP) connecting the SPCF to the APA-owned Amadeus Gas Pipeline. Additional wells will be required over the project life, which are expected to be funded from future project cash flow.
Liberty Energy Inc (NYSE: LBRT), a leading North American energy services firm with significant operational and subsurface engineering expertise, plans to import a modern frac fleet into the Beetaloo Basin in 2024 to support the Shenandoah South Pilot Programme stimulation campaign. Liberty plans to dedicate a frac fleet and crew to the Beetaloo to reduce any potential for delays in mobilising equipment to site and increasing completion efficiencies while reducing costs of future stimulation programs. Liberty’s presence in the Basin follows on from the previously announced similar arrangement with Helmerich and Payne (H&P), the largest drilling solutions provider in the US, whereby H&P imported a 2,000HP rig into the Beetaloo, which is expected to support a material reduction in drilling times and costs.