http://www.bdlive.co.za/business/energy/2015/01/21/fracking-risks-will-be-minimised-promises-falcon

FALCON Oil & Gas, one of the companies preparing to explore for shale gas in the Karoo, yesterday put out a new Environmental Management Plan (EMP) for comment suggesting it could minimise all the risks.

The EMP is for seismic exploration, not for hydraulic fracturing, or fracking, as the gas extraction process from tight rock is known.

The public, and particularly those living in the Karoo, have voiced concern about the potential hazards of exploring for and drilling, or fracking, to extract shale gas, including polluting water resources, damaging the ecosystem and marring the pristine beauty of the semi-desert region.

The government placed a moratorium on issuing licences for shale-gas drilling in 2011, but late last year said companies that had applied for exploration licences before February 1 2011 could update and resubmit their EMPs to Petroleum Agency SA (Pasa) by February 27. Falcon originally applied in August 2010.

In a presentation to Parliament late last year, Department of Mineral Resources director-general Thibedi Ramontja said draft regulations on fracking could be published by this month and exploration licences could be issued by mid-year.

Jonathan Deal of Treasure the Karoo Action Group (TKAG) said there was still no sign of these regulations and they would only cover the seismic drilling phase, not the fracking phase. There was considerable concern about the baseline to be used for studies on water and air quality, since government had proposed monitoring only in a 1km radius. TKAG was aware of a case where a water source was polluted 32km from the exploration site.

According to Falcon’s environmental experts, SRK Consulting, Falcon has amended its EMP on seismic surveying to exclude formal protected areas and a 5km buffer area around them. Falcon intended to use the "shot hole" method. It entails drilling 5m deep holes at 20m intervals and placing small explosive charges in each hole. The waves transmitted bounce back to create a geological picture of the subsurface. The crew will consist of 18-22 people working for six to eight months.

There were two "medium" risks to the process, which could be reduced to "low" risks using mitigation measures, SRK said. These were potential contamination of water resources and loss of, or damage, to natural vegetation. Water risks could be minimised by adequate maintenance of vehicles, addressing spills and removing waste. Vegetation risks could be addressed by keeping mainly to roads and tracks and educating drilling crews of the importance of vegetation. All the other risks that have alarmed the public, including visual impacts, reduced air quality, noise and increased traffic, were regarded as low and would become insignificant with the right protective measures in place, SRK said.

http://www.miningweekly.com/article/petroleum-agency-moves-to-process-pending-shale-gas-applications-2014-10-27

27th October 2014 By: Terence Creamer

The Petroleum Agency South Africa (Pasa) has confirmed on Monday that it would proceed with the processing of pending shale-gas applications received prior to February 1, 2011. The applicants affected include Shell South Africa Upstream, Falcon Oil and Gas and Challenger Energy’s Bundu Oil and Gas Exploration.

http://www.proactiveinvestors.co.uk/companies/news/71717/falcon-oil-chief-oquigley-says-it-was-a-busy-first-half-71717.html#

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."

http://www.proactiveinvestors.co.uk/companies/news/71384/falcon-oil-gass-australian-shale-assets-worth-more-than-double-current-share-price-charles-stanley-71384.html

Falcon Oil & Gas significantly undervalued, Charles Stanley says

By Jamie Ashcroft August 18 2014, 11:18am

Falcon Oil & Gas (LON:FOG) could be set to double in value according to Charles Stanley, which began its coverage of the AIM-quoted shale junior with a ‘buy’ recommendation.

The stockbroker sets a price target of 19.7p – some 120% above the current price of 8.8p – though this is based solely upon Falcon's interests in Australia, which is just one of its three shale assets.

Analyst Brendan Long says Australia is one of the most attractive countries globally for the development of shale resources as he points to the country’s favourable features such as its geology, tax regime, political environment, oil services sector and low population density.

In Australia, Falcon has a significant position (4.6mln acres) in the Beetaloo shale basin in the sparsely populated Northern Territory.

This expanse in the potentially prolific shale is currently estimated to host prospective resource potential of 162 trillion cubic feet of gas and 21bn barrels of oil.

Most of the exploration will be covered by a A$200mln farm-out deal, struck in May, with local operator Origin Energy and South African gas-to-liquids specialist Sasol.

The new partners have committed to a five year programme which will include three vertical exploration wells, one fracked vertical well and five fracked horizontal wells.

“Unlike most of its peers, we expect Falcon’s major forthcoming capital expenditures to be fully carried by major oil companies,” Long said in a note.

The first five wells are slated for the first three years of the arrangement, at an estimated cost of A$64mln.

And while Charles Stanley’s target already sees the Australian venture as a significant catalyst for the share, Charlie Long reckons successful drilling will push the price beyond his punchy price target.

“We believe the first four wells in Australia, expected in 2015 and 2016, can reasonably be expected to increase our valuation and target price by 2.5 times in a success case,” Long added.

“The subsequent drilling of five planned horizontal fracked wells would propel value beyond that in a success case.”

Aside from the project in Australia Long describes Falcon’s assets in South Africa and Hungary as ‘free options’ pending possible political and commercial progress in the respective territories.

Industry News - Need For Small Independents Driving Regulatory Reform - SEPT 2014 Middle East & Africa July 2014 / South Africa / Industry
http://www.oilandgasinsight.com/industry-news-need-small-independents-driving-regulatory-reform-sept-2014

Industry News - Need For Small Independents Driving Regulatory Reform - SEPT 2014 Middle East & Africa July 2014 / South Africa / Industry

BMI View :As South Africa moves towards shale gas exploration, the need to draw involvement from diverse small independents will help support efforts to revise the controversial amended petroleum bill.

Falcon Oil & Gas has announced that it expects to be awarded a shale exploration permit in the second half of 2014. Several companies, including the Anglo-Dutch major Shell, have applied for exploration rights in the country's Karoo Basin. However, permitting has been suspended since 2010, pending impact assessments and the passage of technical regulations. Draft regulations have now been published and should be finalised by the end of the year. They include requirements to comply with American Petroleum Institute procedural standards and the mandatory disclosure of chemicals used in the hydraulic fracturing (fracking) process.

Unsettled Regulatory Environment Slowing Exploration

This article is part of our Middle East & Africa coverage. To access this article subscribe now or sign up for free trial

http://www.proactiveinvestors.co.uk/companies/news/70627/falcon-oil-gass-shale-strategy-is-yielding-results-says-finncap-70627.html

Falcon Oil & Gas’s shale strategy is yielding results, says finnCap

By Jamie Ashcroft July 23 2014, 1:53pm

Falcon Oil & Gas’s (LON:FOG) strategy of monetising unconventional hydrocarbon assets is yielding results, according to broker finnCap, which today began covering the AIM stock with a ‘buy’ recommendation.

Analyst Dougie Youngson says the group’s assets in Australia, Hungary and South Africa should see substantial increases in value upon completion of farm-outs and subsequent exploration activity.

The analyst’s bullish view is reflected in his 27p price target which is some 200% higher than the current price of 9.1p.

A recently agreed farm-out deal for the Australian project, in the sought after Beetaloo shale basin, is a transformational endorsement of Falcon’s strategy, according to Youngson.

“This deal has proven that the strategy works.”

“The company has now proven that it can attract major industry partners and extract value from its portfolio.

“Falcon now has no future capital commitments and is carried through work programmes in both Australia and Hungary.”

“On the assumption that this drilling programme is successful, we will see a substantial increase in the asset’s valuation, with Falcon selling its stake ahead of any potential field development.”

The analyst also says he believes South Africa’s fracking ban will be lifted later this year, and this would trigger a farm-out there too.