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Seizmic indicates conventional traps ( low hanging fruit) this makes this property all the more attractive and should up there leverage on negotiations.
"All the necessary elements of a productive unconventional and CONVENTIONAL petroleum system have been identified in multiple shales and sand reservoirs, and it is now clear that the Beetaloo Basin is an active petroleum system.
Three hydrocarbon plays, the shale gas potential in the basin centre, a shale oil play in the northern part of the permits and CONVENTIONAL prospects have been identified throughout the acreage. Recent interpretation of the seismic database mapped out several CONVENTIONAL drilling targets that are promising areas of hydrocarbons accumulation in the form of structural closures and traps."
Falcon Oil & Gas Limited Operational Update
DUBLIN, IRELAND--(Marketwired - Sept. 3, 2013) - Falcon Oil & Gas Ltd. (TSX VENTURE:FO)(AIM:FOG)(ESM:FAC) ("Falcon" or the "Company"), announces the following operational update.
Highlights
BEETALOO BASIN AUSTRALIA
-- Evaluation of new seismic confirms three distinct hydrocarbon plays
-- An unconventional oil play
-- An unconventional gas play
-- A conventional play of prominent structural ridges near the basin
margins
-- On-going evaluation of core and well data supports presence of world
class oil source rocks in Beetaloo with TOC values in excess of 10%
-- Falcon approached by several oil and gas companies interested in farming
in
-- Farmout progressing well with the objective to ensure that all the plays
are drilled.
-- Successful consolidation of interest in Australia with the acquisition of
Sweetpea's 24% holding completed
HUNGARY
-- Preparations for testing the recently drilled Kútvölgy-1 well
in Hungary are now underway
SOUTH AFRICA
-- Awaiting award of unconventional exploration licence in Karoo Basin.
Continue to work under the Cooperation Agreement with Chevron.
Results of Seismic Program in Beetaloo Basin, Australia
Under the terms of the 2011 Participation Agreement, in 2011 and 2012 Hess acquired 3,490 kilometres of 2D seismic data and invested in excess of $80 million during that period but at no cost to Falcon. The seismic database, along with existing well data, provides a very solid platform to extrapolate a detailed structural and stratigraphic model for the main parts of the Beetaloo Basin.
All the necessary elements of a productive unconventional and conventional petroleum system have been identified in multiple shales and sand reservoirs, and it is now clear that the Beetaloo Basin is an active petroleum system.
Three hydrocarbon plays, the shale gas potential in the basin centre, a shale oil play in the northern part of the permits and conventional prospects have been identified throughout the acreage. Recent interpretation of the seismic database mapped out several conventional drilling targets that are promising areas of hydrocarbons accumulation in the form of structural closures and traps.
Farm-out Discussions in Australia Advancing
Further to our press release dated 1(st) July 2013 Falcon has been approached by several oil and gas companies interested in farming into the Beetaloo Basin. Falcon is well advanced in its discussions with a number of companies and is very confident of securing an attractive farm-out deal with a large oil and gas company. Falcon will provide an update to the market when able to do so.
Acquisition of Sweetpea's shares in Falcon Australia
In order to consolidate its interest in Australia Falcon acquired Sweetpea Petroleum Pty Ltd.'s ("Sweetpea") 50 million shares or 24.22% interest in Falcon Oil & Gas Australia Limited ("FOGA") in July 2013. FOGA is a subsidiary of Falcon and is the registered holder of four exploration permits in the Beetaloo Basin, Northern Territory, Australia. Following the completion of the Share Purchase, Falcon owns 96.9% of the issued share capital of FOGA. The total value of the consideration was CAD22.6 million including CAD3 million in cash and the balance in Falcon common shares. Sweetpea, a wholly owned subsidiary of PetroHunter Energy Corporation, now owns 10.7% of the issued share capital of Falcon.
Preparing to Test the Kútvölgy-1 Well, Hungary
The Kútvölgy-1 well was the first of a planned three well programme to evaluate the gas potential of the Algyo formation in the Makó Trough. As expected, the top of the Algyo formation was encountered at 2,985 metres and the well then penetrated an alternating sequence of sandstones, siltstones and shales over a gross interval of 320 metres to TD, with gas shows throughout. Two conventional cores have been taken and extensive wireline logs were run.
As planned, the well has been cased to TD and is now suspended. Technical evaluation of the well results has been concluded and preparations are now well underway to complete and test this well. The process will involve conventional testing of up to 8 gas bearing intervals as a first phase. A decision on whether hydraulic fracturing of the penetrated tight sands is required will be made upon evaluating the results of conventional flow tests. We expect testing operations to commence before the end of November.
Karoo Basin, South Africa
Falcon expects the conversion of its Technical Cooperation Permit (TCP) to an Exploration Licence to take place in the near term. Recent comments from Rob Davies, Minister for Trade and Industry are encouraging in that regard. "We need to advance the work on taking a decision on shale gas exploration. We want to move before the end of this administration." In the meantime Falcon is working closely with Chevron under the Terms of the December 2012 Cooperation Agreement.
Philip O'Quigley, CEO of Falcon commented:
"The first half of 2013 has been extremely busy for Falcon with drilling in Hungary and seismic in Australia paving the way to the realisation of the potential of our assets. We are encouraged by the on-going discussions and comments from government ministers in South Africa and are well positioned to progress in the region alongside our partner Chevron. With active discussions currently underway regarding our assets in Australia we look forward to further significant developments in the second half of the year."
Falcon is seeking a shale specialist to fund exploration in two areas spanning about 700,000 acres of the Beetaloo basin, chief executive Robert Macaulay told Bloomberg.
The company owns permits covering 7 million acres in the basin in the Northern Territory, according to its website.
The oil and gas explorer, which holds almost 15 million acres in three projects in Australia, Hungary and South Africa, agreed to a venture with New York-based Hess last year to develop three blocks in Beetaloo.
Hess, ConocoPhillips, BG Group and Mitsubishi have agreed to fund shale gas exploration campaigns through ventures in Australia.
Before the Hess transaction, “we had every major in the world active in shale, all the serious players, come by to look at our data,” Macaulay told Bloomberg. “The opportunities in Australia are tremendous. It’s going to become more attractive.”
Hess plans to make a decision by the year-end on whether to fund a five-well drilling program that is expected to start next year, Macaulay said.
Any partnership accord to develop Falcon’s additional holdings in the Beetaloo region, about 600 kilometres (373 miles) south of Darwin, would probably be reached after Hess commits to the drilling plans, he said.
The five wells may cost about $50 million, Macaulay estimated, saying those expenses have yet to be determined. Hess has paid the company $20 million and agreed to fund $40 million of initial work that started last year, Falcon said in July.
Falcon advanced 5.3% to C$0.10 in Toronto trading on Tuesday. The shares have slumped about 39% in the past 12 months.
Santos, Beach Energy, Senex Energy and AWE are among explorers with shale-gas projects in Australia. Santos is planning to drill four unconventional wells in the second half in the Cooper basin, the country’s main source of onshore gas.
With almost 400 trillion cubic feet of estimated shale gas that may be recoverable, Australia has “major” potential in four regions, the US Energy Information Administration said in April.
The areas consist of the Cooper basin straddling the South Australia and Queensland border, the Maryborough basin in Queensland, and the Perth and Canning basins in Western Australia, according to the EIA.
Falcon Oil & Gas Ltd. (FO), an explorer planning to drill shale prospects in Australia with Hess Corp., said it is in negotiations to form a second partnership to develop about 10 percent of its acreage in the country.
Falcon is seeking a shale specialist to fund exploration in two areas spanning about 700,000 acres of the Beetaloo Basin, Chief Executive Officer Robert Macaulay said today in a telephone interview from the company’s headquarters in Denver. The company owns permits covering 7 million acres in the basin in the Northern Territory, according to its website.
The oil and gas explorer, which holds almost 15 million acres in three projects in Australia, Hungary and South Africa, agreed to a venture with New York-based Hess (HES) last year to develop three blocks in Beetaloo. Hess, ConocoPhillips (COP), BG Group Plc (BG/) and Mitsubishi Corp. (8058) have agreed to fund shale gas exploration campaigns through ventures in Australia.
Before the Hess transaction, “we had every major in the world active in shale, all the serious players, come by to look at our data,” Macaulay said. “The opportunities in Australia are tremendous. It’s going to become more attractive.”
Hess plans to make a decision by the year-end on whether to fund a five-well drilling program that’s expected to start in 2013, he said. Any partnership accord to develop Falcon’s additional holdings in the Beetaloo region, about 600 kilometers (373 miles) south of Darwin, would probably be reached after Hess commits to the drilling plans, he said.
The five wells may cost about $50 million, Macaulay estimated, saying those expenses have yet to be determined. Hess has paid the company $20 million and agreed to fund $40 million of initial work that started last year, Falcon said in July.
Shale Potential
Falcon advanced 5.3 percent to 10 Canadian cents in Toronto trading yesterday. The shares have slumped 39 percent in the past 12 months.
Santos (STO) Ltd., Beach Energy Ltd., Senex Energy Ltd. and AWE Ltd. are among explorers with shale-gas projects in Australia. Santos is planning to drill four unconventional wells in the second half in the Cooper Basin, the country’s main source of onshore gas.
With almost 400 trillion cubic feet of estimated shale gas that may be recoverable, Australia has “major” potential in four regions, the U.S. Energy Information Administration said in April. The areas consist of the Cooper Basin straddling the South Australia and Queensland border, the Maryborough Basin in Queensland, and the Perth and Canning basins in Western Australia, according to the EIA.
To contact the reporter on this story: James Paton in Sydney at jpaton4@bloomberg.net
To contact the editor responsible for this story: Amit Prakash at aprakash1@bloomberg.net.