http://www.proactiveinvestors.co.uk Proactiveinvestors RSS feed en Sat, 29 Apr 2017 04:40:29 +0100 http://blogs.law.harvard.edu/tech/rss Genera CMS action@proactiveinvestors.com (Proactiveinvestors) action@proactiveinvestors.com (Proactiveinvestors) <![CDATA[News - Falcon Oil & Gas boss O'Quigley hopes for “not too distant” restart of Australian shale drilling ]]> http://www.proactiveinvestors.co.uk/companies/news/177048/falcon-oil-gas-boss-o-quigley-hopes-for-not-too-distant-restart-of-australian-shale-drilling-177048.html Shale group Falcon Oil & Gas Ltd (LON:FOG, CVE:FO) chief executive Philip O'Quigley told investors he is hopeful of a favourable outcome to the current hiatus in Australia, where there is presently a moratorium on fracking.

Drilling operations may resume “in the not too distant future”, according to O'Quigley.

In Falcon’s financial results for 2016, the company described a landmark year in which a major shale discovery in Australia’s Northern Territory - and, in February 2017, the size of the discovery was estimated ‘world class’ potential of 6.6 trillion cubic feet.

Falcon’s partner Origin Energy will complete a nine well exploration and appraisal programme, if the moratorium is lifted.

O'Quigley said: “2016 was a landmark year for our company with the first extended production test in the Beetaloo basin and the announcement of a material gas resource.

“Our 2017 drilling program is delayed pending the outcome of the independent scientific inquiry on hydraulic fracturing, however we are hopeful of a favourable outcome and the resumption of drilling in the not too distant future."

Falcon reported a strong financial position, ending the year with US$10.1mln of cash.

The growth company, which has nominal revenue, reported a US$3.7mln loss for the year whilst noting that it reduced general and administrative expenses by 18% to US$2mln. 

 

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Fri, 28 Apr 2017 09:14:00 +0100 http://www.proactiveinvestors.co.uk/companies/news/177048/falcon-oil-gas-boss-o-quigley-hopes-for-not-too-distant-restart-of-australian-shale-drilling-177048.html
<![CDATA[RNS press release - Falcon Oil & Gas Ltd.: Full Year Results ]]> http://www.proactiveinvestors.co.uk/companies/rns/170428fogh9859/ Fri, 28 Apr 2017 07:01:00 +0100 http://www.proactiveinvestors.co.uk/companies/rns/170428fogh9859/ <![CDATA[News - Falcon Oil & Gas has seen success but investors await binary Beetaloo decision ]]> http://www.proactiveinvestors.co.uk/companies/news/176798/falcon-oil-gas-has-seen-success-but-investors-await-binary-beetaloo-decision-176798.html Investors in junior oil and gas are typically unafraid of betting on binary outcomes.

However the proposition for Falcon Oil & Gas Ltd (AIM:FOG) (TSX-V:FO) is far from typical. In theory, chief executive Philip O’Quigley and his team have done the hard part.

Frankly it’s done more than most juniors manage: it staked ground with high potential, brought in major partners, convinced them to invest in wells and most importantly the wells were successful (very successful).

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Falcon shares, up about 380% in the year to date, still don’t properly reflect the scale of the opportunity. That’s because the huge volumes of gas discovered in Australia’s Beetaloo basin, in Northern Territory, may potentially remain buried there.

The binary situation is political.

Origin Energy, the lead partner in the shale venture, completed the most recent well just as the political landscape changed, with newly-elected officials launching a moratorium on fracking ahead of a review and a decision on whether it will ban or green-light the exploitation of shale.

Whilst the hiatus began last September, excitement has been building in recent months as weight is seemingly moving in favour of the on-pause shale sector.

A compelling argument for shale

Huge estimates of resources and a purported economic crisis in Australia’s Northern Territory have seemingly converged to make a compelling argument for shale. And that bodes well for AIM-quoted Falcon.

News reports out of Australia’s least populated and least developed region point to tough times for its inhabitants, with chief minister of the Northern Territory, Michael Gunner, earlier this month painting a picture of a “slowing economy with no direction”.

Gunner noted that some US$2bn of regional funding from the Commonwealth would be stripped back while he also said last year was “as bad as it gets”.

At that time, Gunner dismissed calls to prematurely end the fracking hiatus and insisted that the independent review ought to be concluded fully as that would ensure public trust in whichever decision follows the review.

“The purpose behind the moratorium and the independent panel investigating the science of fracking is about more than getting the best advice; it is about ensuring Territorians have faith in the final decision because Territorians know the process followed by Government was rigorous and done right,” he said.

“Further eroding trust and confidence in government by breaking key election commitments like this will only make the task of growing our economy and creating jobs harder.”

That being said, the NT authority’s review is now expected to factor in economics as well as science.

Pressure and potential are key drivers

Amid concerns over the generation capacity and contingencies backing up renewables, Australian economic commentators have called on business and households to consider investment in emergency power sources (diesel generators, batteries and the like).

Indeed, also last month, Australia’s energy market operator predicted shortfalls in gas and electricity.

A research report from Swiss bank UBS just last week highlighted the confluence of factors driving up wholesale electricity and gas prices, which threatens industrial activity.

Analyst David Cassidy in a note said: “From either an economic or equity market perspective we believe there are far more losers than winners.

“We expect virtually all manufacturing and mining companies (with eastern state operations) will experience energy related cost pressures over the next few years.”

Such pressure is unlikely to sit well.

An awful lot of gas to tap

So could the Beetaloo project help alleviate the looming energy crisis? The short answer is, yes.

Sydney-headquartered Origin is leading the shale venture, which covers a project area spanning some 16,000 square kilometres of the Northern Territory previously staked by Falcon.

Falcon dealt Orgin into the project back in August 2014 at the same time as it also brought in South Africa’s Sasol. The AIM-quoted firm retains some 30% of the venture and, significantly, it is carried on the drilling costs.

Excitement surrounding the Beetaloo was piqued in February this year when Origin estimated there was a massive 496 trillion cubic feet (TCF) of gas. That equates to a massive 82bn barrels of oil potential .

Now an awful lot of that has yet to be proven, but drilling and testing immediately prior to the fracking moratorium provided the basis for a resource od 6.6 TCF - which is still very much considered a ‘world class’ class project.

Boost for shareholders

Investors in Falcon were recently buoyed by proposed changes for another unconventional source of gas, which has also been in regulatory hiatus.

The share price sparked 50% higher in the same week that Australia’s deputy Prime Minister, Barnaby Joyce, reportedly supported proposals that would see a ban on coal seam gas drilling lifted, so long as landowners are given a better deal on royalties from sUBSequent gas production.

According to stockbroker WH Ireland, the proposal bodes well for Falcon’s planned development of Australian shale resources.

“In our opinion, this is a significant policy shift as the country seeks to avoid a looming gas shortage,” WH Ireland analyst Brendan Long said in a note.

“It is important to appreciate that the deputy PM is also agricultural minister and we therefore believe his thinking reflects that of Australia’s rural landowning community – the people who count.

“The general idea is to ensure that landholders benefit directly from gas production, which is an incentive that has proven very effective in the USA.”

Long added: “We believe this could pave the way for comparatively positive developments for shale gas developer in Australia, such as Falcon Oil & Gas.”

What comes next for the shale players?

For Falcon and its partners what comes next is as binary as any exploration well.

The pressure is there, as we know, for an earlier resolution but the expectation is that the formal review process won’t complete till as late as December.

Following the review there will be one of two outcomes.

One real possibility is the NT authorities decide it won’t allow fracking, leaving Falcon holding a material stake in some of the largest, unavailable gas resources in the world.

The other possibility is that the moratorium is lifted and the fracking business is given the green light.

In the latter case, Falcon is off to the races.

Even with the uncertainty over the future Falcon’s shares price, around 25p (42 Canadian cents), values the company at around £240mln (C$400mln).

In a future in which shale gas production is possible the company worth multiples more (although I leave it to those better qualified to opine on valuations to sketch in the financial detail).

For context, the current value barely accounts for the A$200mln of investments in the farm-out deals that came when multiple TCF discoveries were still little more than wishful thinking.

A green light could trigger takeover talk

It is also worth highlighting, at this point, that the green would also likely kick-start interest from parties elsewhere in the industry.

In fact, according to some antipodean speculators, the investments may already be underway under the guise of something quite different, pointing to moves by famous Australian mining boss Gina Rinehart – who has become the largest private stakeholder in the Northern Territory as part of her cattle drive.

Whether or not this particular wrinkle in the story has legs cannot be known, at least not while we all wait in limbo for the fracking verdict.

What is clear, however, is that as the smallest of three direct stakeholders in the massive shale discovery Falcon would very likely find itself circled on a shopping list for anyone looking to get into the Aussie shale gas business.

So, for the time being investors will excitedly watch and wait ...

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Mon, 24 Apr 2017 11:59:00 +0100 http://www.proactiveinvestors.co.uk/companies/news/176798/falcon-oil-gas-has-seen-success-but-investors-await-binary-beetaloo-decision-176798.html
<![CDATA[RNS press release - Falcon Oil & Gas Ltd.: Recent Market Activity ]]> http://www.proactiveinvestors.co.uk/companies/rns/170412fogh5887/ Wed, 12 Apr 2017 17:35:00 +0100 http://www.proactiveinvestors.co.uk/companies/rns/170412fogh5887/ <![CDATA[News - Investors give Falcon Oil & Gas more credit for world class shale project in Australia ]]> http://www.proactiveinvestors.co.uk/companies/news/175156/investors-give-falcon-oil-gas-more-credit-for-world-class-shale-project-in-australia-175156.html Exciting is building for investors in Falcon Oil & Gas Ltd (LON:FOG, CVE:FO) with the shares jumping some 50% this week.

The market is seemingly giving the explorer more credit for its potentially huge shale project in Australia’s Northern Territory, with the shares rising to 25.6p from 18p in recent days. 

In February, it was declared that the group’s acreage (some 16,000-square kms) contained a ‘best’ estimate of 496 trillion cubic feet (TCF) of gas. That world class resource equates to a massive 82bn barrels of oil potential.

Successful wells have so far proved up some 6.6 TCF of contingent resources – which amounts to 1.94 TCF net to Falcon.

WATCH: Zak Mir bullish on Falon Oil & Gas ...

The new resource figures immediately sent the shares sharply higher, though the group’s valuation is still tempered by uncertainty, because the drilling programme in Australia was put on hold due to a temporary moratorium on shale gas, whilst the authorities conduct a new evaluation of the emerging industry and its practices.

The moratorium on hydraulic fracturing – the necessary process to complete shale gas wells – was introduced by the NT Government on 14 September 2016 and subsequently an independent panel has been established to conduct an independent inquiry and report back to the government.

The panel is looking at all the issues such as the potential impact on the environment but also the potential economic impact.

New Australian proposal bodes well for Falcon

Proposals to lift a separate but similar ban on coal seam gas operations in Australia prompted the surge in Falcon’s shares this week.

Indeed, according to stockbroker WH Ireland, the proposal bodes well for Falcon’s planned development of Australian shale resources.

Australia’s deputy prime minister Barnaby Joyce is supporting proposals that would see the ban on goal seam gas drilling lifted, so long as landowners are given more of the royalties from subsequent gas production.

“In our opinion, this is a significant policy shift as the country seeks to avoid a looming gas shortage,” WH Ireland analyst Brendan Long said in a note.

“It is important to appreciate that the deputy PM is also agricultural minister and we therefore believe his thinking reflects that of Australia’s rural landowning community – the people who count.

“The general idea is to ensure that landholders benefit directly from gas production, which is an incentive that has proven very effective in the USA.”

Long added: “We believe this could pave the way for comparatively positive developments for shale gas developer in Australia, such as Falcon Oil & Gas.”

Zak Mir charts another 50% upside

Technical analyst Zak Mir reckons the Falcon Oil & Gas Ltd (LON:FOG) share price has room to add another 50% over the coming weeks.

“The shares now are very overbought with the RSI [Relative Strength Index] at 89 out of 100 so a cooling off would be expected back towards the low 20s,” explains Mir in the latest segment of the Proactive Investors Bulletin Board.

“At least while we hold above the 20p zone, the best case scenario target here over the next three to six months is as high as 45p.”

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Tue, 21 Mar 2017 14:21:00 +0000 http://www.proactiveinvestors.co.uk/companies/news/175156/investors-give-falcon-oil-gas-more-credit-for-world-class-shale-project-in-australia-175156.html
<![CDATA[Media files - Another 50% upside in Falcon Oil & Gas, says Zak Mir ]]> http://www.proactiveinvestors.co.uk/companies/stocktube/7136/another-50-upside-in-falcon-oil-gas-says-zak-mir-7136.html Tue, 21 Mar 2017 09:55:00 +0000 http://www.proactiveinvestors.co.uk/companies/stocktube/7136/another-50-upside-in-falcon-oil-gas-says-zak-mir-7136.html <![CDATA[News - New coal seam gas proposals in Australia bode well for shale - broker ]]> http://www.proactiveinvestors.co.uk/companies/news/175054/new-coal-seam-gas-proposals-in-australia-bode-well-for-shale-broker-175054.html A new proposal in Australia to lift bans on coal seam gas operations bodes well for AIM quoted Falcon Oil & Gas Ltd (LON:FOG), so says stockbroker WH Ireland.

Australia’s deputy prime minister Barnaby Joyce is supporting proposals that would see the ban on goal seam gas drilling lifted, so long as landowners are given more of the royalties from subsequent gas production.

“In our opinion, this is a significant policy shift as the country seeks to avoid a looming gas shortage,” WH Ireland analyst Brendan Long said in a note.

“It is important to appreciate that the deputy PM is also agricultural minister and we therefore believe his thinking reflects that of Australia’s rural landowning community – the people who count.

“The general idea is to ensure that landholders benefit directly from gas production, which is an incentive that has proven very effective in the USA.”

Long added: “We believe this could pave the way for comparatively positive developments for shale gas developer in Australia, such as Falcon Oil & Gas.”

Falcon, alongside partners Origin Energy and SASOL, is sitting on potentially huge shale gas resources in Australia’s Northern Territory - though operationally progress is paused by a temporary moratorium on shale gas, whilst the authorities conduct a new evaluation of the emerging industry and its practices.

In February, citing figures produced by Origin Energy, the operator of the 16,000-square kilometres of venture, Falcon said the gross best estimate of gas in place was a world-class 496 trillion cubic feet (TCF). That converts to a massive 82bn barrels of oil potential.

The moratorium on hydraulic fracturing – the necessary process to complete shale gas wells – was introduced by the NT Government on 14 September 2016 and subsequently an independent panel has been established to conduct an independent inquiry and report back to the government.

The panel is looking at all the issues such as the potential impact on the environment but also the potential economic impact.

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Mon, 20 Mar 2017 08:46:00 +0000 http://www.proactiveinvestors.co.uk/companies/news/175054/new-coal-seam-gas-proposals-in-australia-bode-well-for-shale-broker-175054.html
<![CDATA[RNS press release - Second Price Monitoring Extn ]]> http://www.proactiveinvestors.co.uk/companies/rns/170317fog8643z/ Fri, 17 Mar 2017 16:41:00 +0000 http://www.proactiveinvestors.co.uk/companies/rns/170317fog8643z/ <![CDATA[RNS press release - Price Monitoring Extension ]]> http://www.proactiveinvestors.co.uk/companies/rns/170317fog8636z/ Fri, 17 Mar 2017 16:35:00 +0000 http://www.proactiveinvestors.co.uk/companies/rns/170317fog8636z/ <![CDATA[RNS press release - Falcon Oil & Gas Ltd. announces the granting of st ]]> http://www.proactiveinvestors.co.uk/companies/rns/170223fogh1271/ Thu, 23 Feb 2017 07:02:00 +0000 http://www.proactiveinvestors.co.uk/companies/rns/170223fogh1271/ <![CDATA[News - Falcon Oil & Gas boss Philip O’Quigley exercises share options ]]> http://www.proactiveinvestors.co.uk/companies/news/173448/falcon-oil-gas-boss-philip-oquigley-exercises-share-options-173448.html Falcon Oil & Gas Ltd (LON:FOG, CVE:FO) is to receive C$600,000 from the exercise of share option held by chief executive Philip O’Quigley.

The Falcon boss is exercising 6mln options which were due to expire at the end of April, and he pays a strike price of ten Canadian cents per share.

Concurrently, a private placing has been arranged for O’Quigley to sell some 4.5mln of the newly issued shares to a single private shareholder, at a price of 14.5p (23.7 Canadian cents), with the proceeds of the shale sale covering the costs of the option exercise and related tax.

More insights to massive discovery in Australia’s Northern Territory Falcon soars after Aussie partner points to huge gas potential Everybody is on the Falcon Oil & Gas Plc bandwagon - Zak Mir

O’Quigley essentially doubles his equity holding in the company, to just over 3mln shares, as a result of the transactions.

The options were granted to O’Quigley in 2012 when he joined the company as chief executive - he also owns options to take a further 14mln shares.

Falcon shares are up some 180% following the release of a major discovery and resource report for its breakthrough Australian shale project, and with financial results due at the end of April it is about to enter a ‘close period’ (at which point director share dealing would not be allowed).

Last Wednesday, citing figures produced by Origin Energy, its partner in and operator of 16,000-square kilometres of licences, the gross best estimate of gas in place is put at a world-class 496 trillion cubic feet (TCF).

Converting that to oil equivalent, it stacks up to 82bn barrels of the black stuff.

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Tue, 21 Feb 2017 08:52:00 +0000 http://www.proactiveinvestors.co.uk/companies/news/173448/falcon-oil-gas-boss-philip-oquigley-exercises-share-options-173448.html
<![CDATA[RNS press release - Falcon Oil & Gas Ltd.: Director Dealing ]]> http://www.proactiveinvestors.co.uk/companies/rns/170221fogh0276/ Tue, 21 Feb 2017 07:01:00 +0000 http://www.proactiveinvestors.co.uk/companies/rns/170221fogh0276/ <![CDATA[Media files - Everybody is on the Falcon Oil & Gas Plc bandwagon - Zak Mir ]]> http://www.proactiveinvestors.co.uk/companies/stocktube/6943/everybody-is-on-the-falcon-oil-gas-plc-bandwagon-zak-mir-6943.html Mon, 20 Feb 2017 11:33:00 +0000 http://www.proactiveinvestors.co.uk/companies/stocktube/6943/everybody-is-on-the-falcon-oil-gas-plc-bandwagon-zak-mir-6943.html <![CDATA[News - Falcon Oil & Gas gives more insights to massive discovery in Australia’s Northern Territory ]]> http://www.proactiveinvestors.co.uk/companies/news/173275/falcon-oil-gas-gives-more-insights-to-massive-discovery-in-australias-northern-territory-173275.html Falcon Oil & Gas Ltd (LON:FOG) this week revealed it is sitting on a potentially massive discovery in Australia’s Northern Territory.

On Wednesday, citing figures produced by Origin Energy, its partner in and operator of 16,000-square kilometres of licences, the gross best estimate of gas in place is put at a world-class 496 trillion cubic feet (TCF).

Converting that to oil equivalent, it stacks up to 82bn barrels of the black stuff.

This breakthrough has seen the Falcon share price rise some 95%.

Here, we feature questions and answers that provide valuable insights to the project, and what investors can expect in the coming months.

Falcon - Beetaloo discovery Q&A

Q: Wednesday’s press release was in two parts, can you tell us more about that?

A: The first part of our press release talks about the Discovery Report that was submitted to the Northern Territory Government, which was a requirement following the declaration of a discovery in October 2016.

The second part talks about the contingent resource numbers that Origin announced.

Q: Who prepared the Discovery Report?

A: The Discovery Report was prepared by the operator, Origin Energy Resources Limited on behalf of the Beetaloo Joint Venture.

Q: Why was the Discovery Report prepared and to whom was it submitted?

A: The Report was prepared in accordance with the requirements of Section 64 of the Northern Territory Petroleum Act (2016) and submitted to the NT Department of Primary Industry and Resources (DPIR).

It follows the Declaration of a Discovery submitted to the DPIR on the 7th October 2016.

Q: What are the key findings in the Discovery Report?

A: The most significant part of the Report is the estimated Original Gas in Place (OGIP).

Origin calculated a gross best estimate for OGIP of 496 TCF over an area of over 16,000 km2. 

Q What work has Origin based the OGIP estimate on?

A: The JV drilled three vertical wells and one horizontal well over the past couple of years.

In addition, we carried out a hydraulic fracture stimulation on the horizontal well and then completed a 57day extended production test.

All the data from this drilling and production and testing program together with the previously acquired 1,000’s of km’s of seismic was used in determining the OGIP number.

Q: So this basically covers everything Falcon owns in the Beetaloo

A: Not at all. This OGIP number is based solely on the B shale within the middle Velkerri formation.

That is the shale formation that we carried out the extended production test on last year.

However, within the Middle Velkerri we have also identified an “A” and “C” shale.

And then there is the real potential of the Kyalla shale which has yet to be tested. 

Q: Just how big is the project? 16,000 square kilometres sounds like a very large area.

A: It is equivalent to almost 4 million acres. Wales measures around 5m acres. Leinster is about 4.9m acres – so it’s a pretty big area alright. 

Q: And just how big a project would 496 trillion cubic feet really be?

A: While the OGIP is a big number and has a BOE equivalent of 82 billion barrels of oil, we should look at what we think is technically recoverable.  

Origin has taken a conservative view and has taken into account subsurface and surface utilisation factors to come up with a best estimate recovery factor of 16%.

Q: So that is still a pretty big number, in terms of a technically recoverable resource?

A: Yes, it certainly is. It works out to be around 85 TCF.

Q: It seems that Origin has gone further than the OGIP in the Discovery Report and has indicated a contingent gas resource

A: Yes, Origin’s own press release indicates 6.6 trillion cubic feet of gross contingent gas resources, around an area of just 1,968 square kilometres.

This is a very exciting development to be able to advance some of our resource categorisation to a contingent resource.

Q: The 6.6 TCF is just around 1,968 square kilometres - how was this area calculated?

A: This is just the area surrounding and adjacent to the Amungee NW-1H well – the well that we flow tested late last year for 57 days.

Q: Is it possible to extrapolate that number over the entire permit area of 16,000 square kilometre area?

A: It’s a bit too early to do that and we need a lot more wells drilled and extended production tests.

But based on the very encouraging results we got from the Beetaloo W-1 well 85km south of the Amungee well it is exciting.

Q: How does the Beetaloo compare to other shale plays, particularly in the US?

A: In Origin’s opinion and as set out in their own press release as one of the basis for determining a discovery the Marcellus and Barnett Shales in the USA are analogous, commercially productive fields that are similar to the Middle Velkerri B Shale reservoir.

Q: Remind us of the ownership structure, how much of the project does Falcon own?

A: Falcon farmed out 70% of this project to Origin and Sasol back in 2014 in exchange for them carrying Falcon through approximately $200m of capex.

Falcon still own 30% through our 98.1% Australian subsidiary.

Q: There’s currently a moratorium on hydraulic fracturing in the Northern Territory - what is the latest news on this?

A: The moratorium on hydraulic fracturing was introduced by the NT Government on 14 September 2016. Since then an independent Panel has been established to conduct an independent inquiry and report back to the Government.

They plan on publishing an “Issues Paper” before the end of February and then publish an interim report by the mid 2017 with a final report by the end of the year. 

Q: Do you think that this discovery will influence the outcome of the moratorium?

A: The Independent panel has to look at all the issues such as the potential impact on the environment but also the potential economic impact.

This Discovery Report together with Origin’s contingent resource estimate will hopefully provide insight into the potential positive impact this unconventional resource may have on the economy of the NT and on Australia. 

Q: What are the future plans for the joint venture? Will there be more drilling in 2017?

A: Pending the outcome of the moratorium currently in place, Origin has requested a suspension of all drilling operations with the DPIR and await their formal response to the request.

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Thu, 16 Feb 2017 15:35:00 +0000 http://www.proactiveinvestors.co.uk/companies/news/173275/falcon-oil-gas-gives-more-insights-to-massive-discovery-in-australias-northern-territory-173275.html
<![CDATA[News - Falcon Oil and Gas shares flying as it unveils potential 'colossal' gas discovery ]]> http://www.proactiveinvestors.co.uk/companies/news/173216/falcon-oil-and-gas-shares-flying-as-it-unveils-potential-colossal-gas-discovery-173216.html Oil analyst Malcolm Graham Wood said Falcon Oil & Gas (LON:FOG, CVE:FO) is sitting on a potentially very substantial and profitable amount of gas in the Beetaloo Basin.

His comments came after the firm unveiled the findings of a technical report on what could be potentially recovered from its shale licences in the Northern Territory.

Unveiled for three licences EP76, EP98 and EP117 was a gross best estimate of gas in place of 496 trillion cubic feet (TCF) - a word class  figure.  If that is converted to an oil equivalent figure, that comes in at 82bn barrels of the black gold.

"Onshore that is a very, very substantial, profitable amount of gas  whatever happens, and they've got the A and C shales to go after and all sorts of other things as well," said Wood.

He described it as "colossal" potential discovery.

The estimate is for the Velkerri B shale horizon but that's just one potential play on the firm's huge  16,000 sq km acreage, in which it holds a 29.43% working interest.

It was that geological formation, which was put on extended test following the drilling of the Amungee well last year.

Within the Middle Velkerri there’s also the A- and a C-shales – and the Kyalla, which also shows huge potential.

Wood also noted the estimated recovery rate of that gas in place at 16% was a "pretty good" but said recovery rates are less significant when one considers the sheer size of the reservoir.

The fly in the ointment is that there continues to be a moratorium, or temporary prohibition, on drilling in the Northern Territory and an inquiry is currently taking place into hydraulic fracking.

The plan is to publish what’s called an issues paper by the end of the month followed by an interim read-out mid-year and a final report by the end of 2017.

Wood said this is good in the sense that investors should know more about what is in the mind of the local government by then.

"My guess is that the size of it, not even thinking about the tax that the local government could levy on it, would make it worthwhile and they'll give it the amber light with  the green light if it's safe enough."

Another analyst, Job Langbroek at Irish broker Davy, suggested there was a very rational economic argument for the use of domestic gas in Australia in the light of perceived shortfall coming.

"While Australia exports a lot of gas - a lot of LNG - there is a perceived shortage domestically coming, especially if they want to grow their own indigenous industries and use gas," he said.

Shares in Falcon added over 38% in London to stand at 7.25p  a pop on the day.

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Wed, 15 Feb 2017 15:15:00 +0000 http://www.proactiveinvestors.co.uk/companies/news/173216/falcon-oil-and-gas-shares-flying-as-it-unveils-potential-colossal-gas-discovery-173216.html
<![CDATA[News - Scale of Falcon Oil & Gas's resource far bigger than expected, says WH Ireland ]]> http://www.proactiveinvestors.co.uk/companies/news/173198/scale-of-falcon-oil-gas-s-resource-far-bigger-than-expected-says-wh-ireland-173198.html Scribes at broker WH Ireland are upbeat on Falcon Oil & Gas's (LON:FOG, CVE:FO) announcement today, which encouragingly points to what lies beneath its acreage in the Northern Territory’s Beetaloo Basin.

Citing figures produced by Origin Energy, its partner in and operator of 16,000-square kilometres of licences,  Falcon revealed a gross best estimate of gas in place at a world-class 496 trillion cubic feet (TCF).

That was for the Velkerri B shale horizon within three key licences - EP76, EP98 and EP117 - just one shale horizon, within acreage that is home to multiple plays.

WATCH - Falcon Oil & Gas boss 'more than pleased' with Beetaloo Basin gas in place report

"In our opinion, the scale of the resource is much greater than we had anticipated even if we knew the licence position was massive," said analyst Brendan Long, who also highlighted that the resource assessment was focused on just one single shale horizon.

Long believes that sort of scale attracts capital and the resource is "clearly strategically significant for energy importing countries.

"It would move the dial even for big LNG importers," he says.

He adds that the domestic gas shortage crisis is Australia also creates an interesting backdrop.

Most importantly, he reckons, is that the resource is concentrated with high recovery rates with contingent resources (2C) of 11%, implying a recovery of 3.35 bcf (billion cubice feet) per square kilometre.

The technically recoverable estimates imply a recovery factor of 16% and a recoverable resource of 0.877 mmboe (million barrels of oil equivalent) per square kilometre.

"We believe that having 2C estimates would have been an excellent result at the end of the two-phase drilling program, to be there around the half-way mark suggests the asset quality is increasingly obvious."

Falcon has a 29.43% working interest in the Beetaloo project. Origin is a 35% joint venture partner.

Shares in Falcon in London added almost 24% to 6.5p each in early deals.

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Wed, 15 Feb 2017 11:36:00 +0000 http://www.proactiveinvestors.co.uk/companies/news/173198/scale-of-falcon-oil-gas-s-resource-far-bigger-than-expected-says-wh-ireland-173198.html
<![CDATA[News - Falcon Oil & Gas's O'Quigley very excited about Beetaloo Basin ]]> http://www.proactiveinvestors.co.uk/companies/news/173196/falcon-oil-gas-s-o-quigley-very-excited-about-beetaloo-basin-173196.html Philip O'Quigley, the chief executive of Falcon Oil & Gas (LON:FOG, CVE:FO), described himself as "more than pleased" with the report submitted by partner Origin Energy on its shale acreage in the Beetaloo Basin in the Northern Territory, Australia.

That put a gross best estimate of gas in place at a world-class 496 trillion cubic feet - or up to 82bn barrels of oil equivalent - for the Velkerri B shale horizon within three key licences - EP76, EP98 and EP117.

But that's just one potential play on the huge  16,000 sq km acreage.

"We've got multiple play horizons within the Beetaloo. The primary target was always the  Middle Velkerri and we drilled that successfully back in 2015 and repeated again in 2016 and within the Middle Velkerri there's an A, B and C shale but this report only talks to one of those plays within the package - the B shale."

He added: "There's a lot more to go after but at a starting point of 496 trillion cubic feet  (TCF) just for the middle  Velkerri  it's a pretty good place to start."

The Origin report also gave an estimate of the range of recovery possible of that gas in place, and O'Quigley says they have taken a relatively conservative view, considering various factors, and put that at 16- 17%.

Dong the maths, he say, that  still amounts to a "staggering" 85 TCF with a recovery factor of 16%.

"That's just a huge number," he told Proactive's Andrew Scott.

"We are more than pleased. We are very excited about all of this," he added. "It's a great day for Falcon shareholders."

Falcon has a 29.43% working interest in the Beetaloo project. Origin is a 35% joint venture partner.

Shares in Falcon in London added almost 24% to 6.5p each.

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Wed, 15 Feb 2017 11:07:00 +0000 http://www.proactiveinvestors.co.uk/companies/news/173196/falcon-oil-gas-s-o-quigley-very-excited-about-beetaloo-basin-173196.html
<![CDATA[Media files - Davy analyst on Falcon Oil & Gas's Beetaloo Basin report ]]> http://www.proactiveinvestors.co.uk/companies/stocktube/6919/davy-analyst-on-falcon-oil-gas-s-beetaloo-basin-report-6919.html Wed, 15 Feb 2017 07:45:00 +0000 http://www.proactiveinvestors.co.uk/companies/stocktube/6919/davy-analyst-on-falcon-oil-gas-s-beetaloo-basin-report-6919.html <![CDATA[Media files - Falcon Oil & Gas has "colossal" potential gas discovery, says Wood ]]> http://www.proactiveinvestors.co.uk/companies/stocktube/6918/falcon-oil-gas-has-colossal-potential-gas-discovery-says-wood-6918.html Wed, 15 Feb 2017 07:40:00 +0000 http://www.proactiveinvestors.co.uk/companies/stocktube/6918/falcon-oil-gas-has-colossal-potential-gas-discovery-says-wood-6918.html <![CDATA[News - Falcon Oil soars 50% after report by Aussie partner points to huge gas potential of its licences ]]> http://www.proactiveinvestors.co.uk/companies/news/173156/falcon-oil-soars-50-after-report-by-aussie-partner-points-to-huge-gas-potential-of-its-licences-173156.html Shares in Falcon Oil & Gas (LON:FOG, CVE:FO) soared 50% after it gave an indication as to what lies beneath the surface of its acreage in Northern Territory’s Beetaloo Basin.

Citing figures produced by Origin Energy, its partner in and operator of 16,000-square kilometres of licences, the gross best estimate of gas in place is put at a world-class 496 trillion cubic feet (TCF).

Converting that to oil equivalent, it stacks up to 82bn barrels of the black sticky stuff.

WATCH - Falcon Oil & Gas boss 'more than pleased' with Beetaloo Basin gas in place report WATCH; Broker and commentator give theur take on huge discovery 

Now, a few points to make here:

1.    That figure is an approximation of what resides within the B-shale of the Middle Velkerri formation. That’s the formation put on extended test following the drilling of the Amungee well last year. Within the Middle Velkerri there’s also the A- and a C-shales – and the Kyalla, which, while untested, shows huge potential.

2.    The report by Origin (which owns 35% of the Beetaloo acreage) sets a very conservative recovery rate of just 16%. Yet even using that figure you get a technically recoverable resource of 85TCF, or 25TCF net to Falcon, which owns around 30%.

3.    The concentration is 31bn cubic feet per square-kilometre. Experts say the Velkerri-B geology is very similar to the commercially prolific Marcellus and Barnett shales of the US.

 

Multiple play potential...

Chief executive Philip O'Quigley told Proactive: "We've got multiple play horizons within the Beetaloo. The primary target was always the Middle Velkerri and we drilled that successfully back in 2015 and repeated again in 2016 and within the Middle Velkerri there's an A, B and C shale but this report only talks to one of those plays within the package - the B shale."

"There's a lot more to go after but at a starting point of 496 trillion cubic feet  (TCF) just for the middle  Velkerri  it's a pretty good place to start," he added.

"We are more than pleased. We are very excited about all of this. It's a great day for Falcon shareholders."

Okay, now forgive the pun, but drilling down Falcon has highlighted a passage from the Origin report that provides a higher confidence contingent resource estimate (our graphic shows how the classifications work).

This is focused on 1,968-square kilometres around the Amungee well, which is around 12% of the total acreage.

From a gas in place number of 61TCF, the gross contingent resource is 6.6TCF, or 1.94TCF net to Falcon.

“In any world that is still an uber discovery and is from a small piece of our acreage,” Falcon’s chief executive Philip O’Quigley told Proactive Investors.

“This is fantastic news and probably the biggest news for the company ever.”

Now before the bunting is rolled out and O’Quigley and the Falcon team are carried shoulder-high through the City of London, there is the small matter of a drilling moratorium in Northern Territory to consider.

An inquiry is currently taking place into hydraulic fracking.

The plan is to publish what’s called an issues paper by the end of the month followed by an interim read-out mid-year and a final report by the end of 2017.

However, the scale of the Origin discovery is likely to crystalise the thinking of the lawmakers of Northern Territory.

Falcon brought in Origin and South Africa’s Sasol, which has 25%, as part of a shrewd deal that will see Falcon carried through US$200mln of drilling on the Beetaloo.

Falcon shares were up 50% in late morning trade at 8p each.

READ: WH Ireland report in full

“In our opinion the scale of the resource is much greater than we had anticipated even if we knew the licence position was massive,” said WH Ireland.

“We believe scale attracts capital; the resource is clearly strategically significant for energy importing countries – it would move the dial even for big LNG [liquefied natural gas] importers."

“We believe the domestic gas shortage crisis is Australia creates an interesting backdrop for the scientific enquiry,” WHI concluded.

--- adds broker comment and updates share price ---

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Wed, 15 Feb 2017 07:04:00 +0000 http://www.proactiveinvestors.co.uk/companies/news/173156/falcon-oil-soars-50-after-report-by-aussie-partner-points-to-huge-gas-potential-of-its-licences-173156.html
<![CDATA[RNS press release - Falcon Oil & Gas Ltd. : Beetaloo Basin Drilling Re ]]> http://www.proactiveinvestors.co.uk/companies/rns/170215fogh8702/ Wed, 15 Feb 2017 07:01:00 +0000 http://www.proactiveinvestors.co.uk/companies/rns/170215fogh8702/ <![CDATA[Media files - Falcon Oil & Gas boss 'more than pleased' with Beetaloo Basin gas in place report ]]> http://www.proactiveinvestors.co.uk/companies/stocktube/6917/falcon-oil-gas-boss-more-than-pleased-with-beetaloo-basin-gas-in-place-report-6917.html Wed, 15 Feb 2017 05:45:00 +0000 http://www.proactiveinvestors.co.uk/companies/stocktube/6917/falcon-oil-gas-boss-more-than-pleased-with-beetaloo-basin-gas-in-place-report-6917.html <![CDATA[Media files - MUST WATCH - Origin Energy video gives insights to Beetaloo shale ]]> http://www.proactiveinvestors.co.uk/companies/stocktube/6784/must-watch-origin-energy-video-gives-insights-to-beetaloo-shale-6784.html Tue, 24 Jan 2017 12:31:00 +0000 http://www.proactiveinvestors.co.uk/companies/stocktube/6784/must-watch-origin-energy-video-gives-insights-to-beetaloo-shale-6784.html <![CDATA[News - Falcon Oil delighted with flow test result from Amungee ]]> http://www.proactiveinvestors.co.uk/companies/news/170862/falcon-oil-delighted-with-flow-test-result-from-amungee-170862.html Falcon Oil & Gas Ltd (CVE:FO LON:FOG) reported that an extended production test of the Amungee NW-1H horizontal well confirmed consistent gas flows of more than one million cubic feet per day.

Partner Origin Resources released the results, which showed initial production over the first 30 days averaged 1.11 MMscf/d with a rate of 1.10 MMscf/d over the whole 57 days of testing and a final rate of 1.07 MMscf/d.

Philip O'Quigley, Falcon’s chief executive, said the results were a significant milestone in the exploration programme and will be used to evaluate a contingent resource at Beetaloo in Australia’s Northern Territory.

There is currently a moratorium on fracking in the region while the government assesses its impact.

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Thu, 22 Dec 2016 08:29:00 +0000 http://www.proactiveinvestors.co.uk/companies/news/170862/falcon-oil-delighted-with-flow-test-result-from-amungee-170862.html
<![CDATA[RNS press release - Falcon Oil & Gas Ltd.: Completion of Extended ]]> http://www.proactiveinvestors.co.uk/companies/rns/161222fogm0832/ Thu, 22 Dec 2016 07:00:00 +0000 http://www.proactiveinvestors.co.uk/companies/rns/161222fogm0832/ <![CDATA[RNS press release - Falcon Oil & Gas Ltd. - Holdings in Company ]]> http://www.proactiveinvestors.co.uk/companies/rns/161209fogm5892/ Fri, 09 Dec 2016 11:59:00 +0000 http://www.proactiveinvestors.co.uk/companies/rns/161209fogm5892/ <![CDATA[News - Falcon Oil & Gas looks forward to Aussie shale gas progress ]]> http://www.proactiveinvestors.co.uk/companies/news/169586/falcon-oil-gas-looks-forward-to-aussie-shale-gas-progress-169586.html With the filing of its interim statement Falcon Oil & Gas Ltd (LON:FOG) highlighted that its partner Origin Energy intends to meet with the Northern Territory authorities soon to discuss a revised timetable for its shale gas venture.

It comes amid a moratorium on fracking, put in place following the recent Australian election.

As a new government sponsored assessment of fracking takes place the joint venture - between Falcon, Origin and Sasol – is confined to desktop analysis and evaluation work.

After a successful start to what was supposed to be a nine-well drill programme Origin in October issued an official notification of discovery.

Falcon boosted by significant Aussie shale gas milestone Beetaloo shale gas discovery is “terribly exciting”

A new resource evaluation report is currently being worked on to further detail the size and scope of the discovery and the potential of its surrounding areas.

Separately, Falcon also highlighted that the government process is ongoing in South Africa, where it is expected that exploration licences will be issued in 2017.

In terms of financials Falcon pointed to its strong positions. It says it had US$10.6mln of cash at the end of September and it was debt free.

The company told investors it continues to focus on strict cost management, and efficient control of its portfolio. General and admin costs were reduced by 13% in the first half of the year, down to US$1.6mln.

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Mon, 28 Nov 2016 07:46:00 +0000 http://www.proactiveinvestors.co.uk/companies/news/169586/falcon-oil-gas-looks-forward-to-aussie-shale-gas-progress-169586.html
<![CDATA[RNS press release - Falcon Oil & Gas Ltd.: Filing of Interim Finan ]]> http://www.proactiveinvestors.co.uk/companies/rns/161128fogm9202/ Mon, 28 Nov 2016 07:00:00 +0000 http://www.proactiveinvestors.co.uk/companies/rns/161128fogm9202/ <![CDATA[News - Falcon Oil & Gas boosted by significant Aussie shale gas milestone ]]> http://www.proactiveinvestors.co.uk/companies/news/167309/falcon-oil-gas-boosted-by-significant-aussie-shale-gas-milestone-167309.html There’s lots still to do, but today’s declaration that Amungee is officially a discovery marks a significant milestone for Falcon Oil & Gas Plc (LON:FOG, CVE:FO).

Amungee NW-1H, the well that is still being tested, is one element of an ongoing and successful exploration programme that’s being led by Australian major Origin Energy.

“Origin came on board couple of years ago and started drilling only last year, this project is just going from strength to strength,” Philip O’Quigley, Falcon chief executive, said in an interview with Proactive Investors.

“This declaration of discovery is a huge leap forward, so it is terribly exciting.”

“All in all, we’ve had five operations in the last eighteen months or so.”

“It has been a fantastic exploration programme to date, working with Origin, really a world class operator.”

At Amungee a flow testing programme is still in the early stages - 10 of at least 30 days have past since flows began - and the well continues to recover fluids from the fracking programme.

Nevertheless, the well has been producing rates of between 0.8 and 1.2 million standard cubic feet of gas per day and early analysis indicates a dry gas composition containing less than 4% carbon dioxide.

The shale discovery itself is said to have a thickness of 30 metres. Porosity was said to be between 4.0% and 7.5%; gas saturation is measured between 50% to 75%, and permeability between 50 and 500 nano-Darcy.

Falcon highlighted that work to determine the discovery’s size is ongoing.

“That’s a lot of desktop study to go on with the next coming months,” O’Quigley said. “Then, we’ll head into the next phase of the drilling programme.”

Exactly what those plans will look like is somewhat unclear presently due to the recent start of a moratorium on hydraulic fracture stimulation in the Northern Territory, following the election of a new Australian government in the summer.

In reference to the temporary moratorium, O’Quigley added: “that kind of puts a stall on us, if you like, to what would otherwise be an accelerated drilling programme on the back of these fantastic results.”

O’Quigley notes that a prior independent assessment of the often controversial extraction method – which was commissioned under the prior government, had previously made strong conclusions and recommendations in favour of the industry.

“In the report, he [Dr Allan Hawke] comes out with two rather strong statements and recommendations.

“One being that the environmental risks associated with hydraulic fracturing can be managed effectively, subject to the creation of a robust regulatory regime.

“And the other heavy statement he makes is that, having taken regard to the weight of all the expert opinion – and I think there was something like 260 submissions made - his enquiry finds that there is no justification whatsoever for the imposition of a moratorium on hydraulic fracturing in the northern territory.”

Australia’s new labour led government has now put the moratorium in place and is commissioning it’s a further independent enquiry.

Falcon and Origin won’t be sitting on their hands in the meantime, however, as there’s plenty of desk top work still to be done.

O’Quigley told Proactive Investors he looks forward to bringing more positive operational news in the coming months.

“This is a vast basin. We’ve got something in the order of 4.6mln acres, so you know, this is early stages but we’re taking huge positive steps with every step we make,” he added.

On Wednesday, Falcon shares gained around 6% to trade at 4.37p.

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Thu, 13 Oct 2016 07:00:00 +0100 http://www.proactiveinvestors.co.uk/companies/news/167309/falcon-oil-gas-boosted-by-significant-aussie-shale-gas-milestone-167309.html
<![CDATA[Media files - Falcon boss: Beetaloo shale gas discovery “terribly exciting” ]]> http://www.proactiveinvestors.co.uk/companies/stocktube/6174/falcon-boss-beetaloo-shale-gas-discovery-terribly-exciting-6174.html Wed, 12 Oct 2016 14:45:00 +0100 http://www.proactiveinvestors.co.uk/companies/stocktube/6174/falcon-boss-beetaloo-shale-gas-discovery-terribly-exciting-6174.html <![CDATA[RNS press release - Notification of Discovery - Amungee NW-1H ]]> http://www.proactiveinvestors.co.uk/companies/rns/161012fogm2492/ Wed, 12 Oct 2016 07:07:00 +0100 http://www.proactiveinvestors.co.uk/companies/rns/161012fogm2492/ <![CDATA[News - Falcon Oil & Gas’s Aussie shale discovery declared official ]]> http://www.proactiveinvestors.co.uk/companies/news/167271/falcon-oil-gass-aussie-shale-discovery-declared-official-167271.html Falcon Oil & Gas Ltd's (LON:FOG, CVE:FO) joint-venture partner Origin Energy has officially declared Amungee as a new discovery.

It follows successful drilling. The most recent results, from the Amungee NW-1H well, are encouraging and evaluation work continues.

Origin, the project operator, has submitted a notification of discovery and an initial report on discovery to the Department of Primary Industry and Resources of the Northern Territory, Australia.

This means there’s sufficient data to confirm the discovery of a petroleum accumulation. Specifically, the discovery is confirmed by production testing data, petro-physical logs and core analysis.

Origin noted the gas rates ranging between 0.8 and 1.2 million standard cubic feet per day. The flow-back of hydraulic fracture stimulation fluid of volumes continues, with the recovery of between 100 and 400 barrels per day.

Initial estimates suggest a dry gas composition with less than 4% CO2, it added.

It said the discovery has a thickness of 30 metres. The discovery has porosity between 4.0% and 7.5%; gas saturation is measured between 50% to 75%, and permeability between 50 and 500 nano-Darcy.

Work continues to determine the size of the discovered resource.

Philip O’Quigley, Falcon chief executive, described the filing with the Australian authorities as an “exciting development” and he added that it provides further evidence of the scale of resource potential of the Beetaloo Basin.

“We look forward to updating the market when the evaluation to determine the resource size is concluded,” O’Quigley said.

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Wed, 12 Oct 2016 07:03:00 +0100 http://www.proactiveinvestors.co.uk/companies/news/167271/falcon-oil-gass-aussie-shale-discovery-declared-official-167271.html
<![CDATA[News - Falcon Oil & Gas appoints Anne Flynn as new chief financial officer ]]> http://www.proactiveinvestors.co.uk/companies/news/166933/falcon-oil-gas-appoints-anne-flynn-as-new-chief-financial-officer-166933.html Falcon Oil & Gas Ltd (LON:FOG, CVE:FO) has announced that Anne Flynn, the present financial controller, has been named as the group’s new chief financial officer.

Flynn will take over from Michael Gallagher, who has resigned with immediate effect to pursue other interests.

She has been financial controller since 2014, previously she held a managerial role at Adobe and worked for PwC for six years.

Philip O'Quigley, Falcon chief executive, said: “I am very pleased to announce the appointment of Anne as chief financial officer and would like to welcome her to the senior management team at Falcon.

“On behalf of the board, I want to acknowledge the significant contribution by Michael as CFO of Falcon and wish him well in the future."

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Wed, 05 Oct 2016 07:16:00 +0100 http://www.proactiveinvestors.co.uk/companies/news/166933/falcon-oil-gas-appoints-anne-flynn-as-new-chief-financial-officer-166933.html
<![CDATA[RNS press release - Falcon Oil & Gas Ltd. Announces Senior Managem ]]> http://www.proactiveinvestors.co.uk/companies/rns/161005fogm5032/ Wed, 05 Oct 2016 06:59:00 +0100 http://www.proactiveinvestors.co.uk/companies/rns/161005fogm5032/ <![CDATA[News - Falcon Oil & Gas reveals ‘very encouraging’ early flow rates from Australian shale well ]]> http://www.proactiveinvestors.co.uk/companies/news/166643/falcon-oil-gas-reveals-very-encouraging-early-flow-rates-from-australian-shale-well-166643.html Falcon Oil & Gas Ltd (LON:FOG, CVE:FO) has told investors that early gas flow rates from the horizontal Amungee NW-1H well, in Australia’s Beetaloo basin, are encouraging.

The flow regularly exceeded rates of one million cubic feet per day, and were consistently between 0.4 and 0.6 million cubic feet per day.

“Preliminary results of the first horizontal exploration well in the Beetaloo are very encouraging. The planned testing programme utilising a production tubing string aims to evaluate the potential gas flow rate of the well, said Falcon chief executive Philip O’Quigley.

“We look forward to updating the market when further results become available.”

In a statement this morning Falcon confirmed that an eleven stage hydraulic stimulation programme was successfully completed along a 1,000 metre horizontal well section in the Middle Velkerri B shale zone.

It added that the flow-back of fracture stimulation fluid continues to return to surface.

A work-over rig is now being mobilised so that production tubing can be installed to enable an extended production test.

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Thu, 29 Sep 2016 07:01:00 +0100 http://www.proactiveinvestors.co.uk/companies/news/166643/falcon-oil-gas-reveals-very-encouraging-early-flow-rates-from-australian-shale-well-166643.html
<![CDATA[RNS press release - Falcon Oil & Gas Ltd.: Update on Hydraulic Sti ]]> http://www.proactiveinvestors.co.uk/companies/rns/160929fogm8982/ Thu, 29 Sep 2016 07:00:00 +0100 http://www.proactiveinvestors.co.uk/companies/rns/160929fogm8982/ <![CDATA[Media files - Falcon Oil & Gas boss O’Quigley reacts to “big well” result for Australian shale venture ]]> http://www.proactiveinvestors.co.uk/companies/stocktube/5992/falcon-oil-gas-boss-oquigley-reacts-to-big-well-result-for-australian-shale-venture-5992.html Wed, 14 Sep 2016 12:07:00 +0100 http://www.proactiveinvestors.co.uk/companies/stocktube/5992/falcon-oil-gas-boss-oquigley-reacts-to-big-well-result-for-australian-shale-venture-5992.html <![CDATA[News - Drilling at Falcon Oil & Gas’s Beetaloo project yields “encouraging” results ]]> http://www.proactiveinvestors.co.uk/companies/news/165874/drilling-at-falcon-oil-gass-beetaloo-project-yields-encouraging-results-165874.html Falcon Oil & Gas Ltd (LON:FOG) has confirmed significant indications of gas in both the Middle Velkerri and Lower Kyalla formations at W-1 well it the Beetaloo Basin in Australia.

“Excellent gas shows” were discovered at two prospective shale sweet spots at the top and base of the Middle Velkerri formation, which Falcon said was comparable to those encountered during last year’s drilling programme.

The Lower Kyalla formation – which is considered as a secondary shale target – also provided excellent gas shows within “a 150m thick liquid rich sequence”.

Dublin-based Falcon added that hydraulic stimulation at the horizontal Amungee NW-1H well has been completed, and expects gas to start flowing back to the surface “in the next week or two”.

“The results of Beetaloo W-1 to date and the successful hydraulic stimulation of Amungee NW-1H represent further positive steps for the exploration phase of the program,” said chief executive Philip O’Quigley.

“Encountering significant net pay in the Middle Velkerri formation, 85km from our 2015 drilling programme along with significant net pay in the Lower Kyalla is very encouraging.”

The Beetaloo W-1 well – the fourth of five wells planned for 2015/16 programme – was designed to test the presence, depth, thickness and physical reservoir properties of the Kyalla and the Middle Velkerri formations.

Falcon retains a 35% stake in the Australian shale venture with partners Origin and Sasol each owning 35%.

A farm-out deal in 2014 that brought in the two partners sees them pay all Falcon’s share of costs for the initial programme of five wells, estimated at around A$64mln.

Later, planned for 2017, they will also cover costs associated with two horizontally fracture stimulated wells, 90 day production tests and micro seismic data collection – Falcon’s carry is capped to A$53mln for this phase.

And in 2018 a further two well horizontal drilling programme, including fracking and 90 day tests, will see Falcon carried for up to A$48mln.

Away from the drill results, the newly-elected Australian government will follow through with its pre-election pledge to put a moratorium on fracking in the Northern Territory.

The moratorium will be introduced today and will remain in place until the government has reviewed the recommendations of an independent scientific inquiry.

Shares in Falcon dipped 0.25, or 5%, to 5.25p. 

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Wed, 14 Sep 2016 09:02:00 +0100 http://www.proactiveinvestors.co.uk/companies/news/165874/drilling-at-falcon-oil-gass-beetaloo-project-yields-encouraging-results-165874.html
<![CDATA[RNS press release - News ]]> http://www.proactiveinvestors.co.uk/companies/rns/160914fogm2763/ Wed, 14 Sep 2016 07:00:00 +0100 http://www.proactiveinvestors.co.uk/companies/rns/160914fogm2763/ <![CDATA[RNS press release - Filing of Interim Financial Statements ]]> http://www.proactiveinvestors.co.uk/companies/rns/160826fogm1552/ Fri, 26 Aug 2016 07:00:00 +0100 http://www.proactiveinvestors.co.uk/companies/rns/160826fogm1552/ <![CDATA[News - Falcon Oil spuds Beetaloo well, readies for Amungee fracking ]]> http://www.proactiveinvestors.co.uk/companies/news/128554/falcon-oil-spuds-beetaloo-well-readies-for-amungee-fracking-128554.html Falcon Oil & Gas Ltd (LON:FOG) told investors that drilling is now underway on the latest well in its Australian shale play, in the Beetaloo basin.

The Beetaloo W-1 was spudded on July 22 in a location 85 kilometres south of the previously drilled Kalala S-1, where it will test an unexplored area of the southern Beetaloo basin for shale and hybrid shale-sand plays in the Velkerri and Kyalla formations.

It is the fourth of five wells planned in the 2015/16 programme, in which Falcon’s share of costs are being carried by joint venture partners Origin Energy and Sasol.

Falcon also highlighted that preparations are underway for the upcoming fracking and production testing of the Amungee NW-1H well.

In November, the well cut a 1,100 metre horizontal section into the “B Shale” interval of the Middle Velkerri formation. That horizontal has since been cased and cemented, and the preparations for fracking are being finalised.

Fracking is expected to begin by mid-August, and is estimated to take up to 2 weeks. An extended production well test is planned after that.

Philip O'Quigley, Falcon chief executive, said: "The multi-stage hydraulic stimulation of the horizontal section of the Amungee NW-1H well, scheduled to be completed next month, could go a long way towards proving up the resource potential of the Beetaloo Basin.

“The Beetaloo W-1 well represents another exciting phase of the exploration program given that it will be the first well to penetrate the Middle Velkerri member in the south of the basin.

“We look forward to updating the market on both of these key operations as information becomes available."

The Beetaloo W-1 well is designed to test the presence, depth, thickness and physical reservoir properties of the Kyalla and the Middle Velkerri formations.

It is being drilled down to a target depth of 3,045 metres, and that is scheduled to take between 35 and 50 days.

Falcon retains a 35% stake in the Australian shale venture with partners Origin and Sasol each owning 35%.

The farm-out deals in 2014 that brought in the two partners sees them pay all Falcon’s share of costs for the initial programme of five wells, estimated at around A$64mln.

Later, planned for 2017, they will also cover costs associated with two horizontally fracture stimulated wells, 90 day production tests and micro seismic data collection – Falcon’s carry is capped to A$53mln for this phase.

And in 2018 a further two well horizontal drilling programme, including fracking and 90 day tests, will see Falcon carried for up to A$48mln.

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Mon, 25 Jul 2016 07:44:00 +0100 http://www.proactiveinvestors.co.uk/companies/news/128554/falcon-oil-spuds-beetaloo-well-readies-for-amungee-fracking-128554.html
<![CDATA[RNS press release - News ]]> http://www.proactiveinvestors.co.uk/companies/rns/160725fogm6832/ Mon, 25 Jul 2016 06:59:00 +0100 http://www.proactiveinvestors.co.uk/companies/rns/160725fogm6832/ <![CDATA[News - Falcon Oil & Gas advancing towards production testing ]]> http://www.proactiveinvestors.co.uk/companies/news/127380/falcon-oil-gas-advancing-towards-production-testing-127380.html Falcon Oil & Gas Ltd (LON:FOG, CVE:FO) gave a brief operational update alongside its AGM results statement, highlighting that work to re-enter the Amungee NW-1H well has begun.

Amungee NW-1H, drilled last year, in Australia’s Beetaloo shale basin, is being re-entered so that can be fracked and tested.

The project operator, Origin Energy, expects production casing and cementing of the well will be completed by the end of June.

After that, a multi-stage fracture stimulation programme will take place by the end of July, which will essentially start a 90 day production testing programme.

Additionally, Falcon highlighted that civil works got underway last month for a new well site, where the Beetaloo W-1 vertical well will be drilled.

Beetaloo W-1 is expected to start in July, once the rig has been released from the Amungee site.

Falcon also noted that all resolutions put forward for the AGM were passed by shareholders.

John Craven, a founding director of the company, has stepped down from the Falcon board.

Craven, in a statement, said: “After many years as a director of Falcon, I now step down from the Board. I believe the company has a strong platform on which to build value across its portfolio. I wish the board and management every success for the future."

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Wed, 22 Jun 2016 08:16:00 +0100 http://www.proactiveinvestors.co.uk/companies/news/127380/falcon-oil-gas-advancing-towards-production-testing-127380.html
<![CDATA[RNS press release - Falcon Oil & Gas Ltd. Holds Annual & Speci ]]> http://www.proactiveinvestors.co.uk/companies/rns/160622fogm9522/ Wed, 22 Jun 2016 07:00:00 +0100 http://www.proactiveinvestors.co.uk/companies/rns/160622fogm9522/ <![CDATA[News - Falcon Oil & Gas expects Karoo Basin licence in 2016 ]]> http://www.proactiveinvestors.co.uk/companies/news/126439/falcon-oil-gas-expects-karoo-basin-licence-in-2016-126439.html Falcon Oil & Gas Ltd (LON:FOG) is hopeful that it will be awarded a shale gas exploration licence for Karoo Basin in the second half of the year.

“The board now expects that the exploration right over the acreage will be awarded in 2016,” the company said in its interim statement.

The Karoo Basin is located in South Africa, and the board says that it’s confident it is a “well-suited” area in which to find shale oil and shale gas.

Elsewhere in its interim results for the three months to March, Falcon said it was debt-free with nearly US$12mln in cash.

It also reduced its general and admin expenses by 12% to US$0.5mln from US$0.6mln a year earlier, as a result of its “continued focus on strict cost management.”

Its total loss for the period was US$1.3mln.

Shares were up 0.15p, or 2%, to 7.9p.

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Thu, 26 May 2016 13:43:00 +0100 http://www.proactiveinvestors.co.uk/companies/news/126439/falcon-oil-gas-expects-karoo-basin-licence-in-2016-126439.html
<![CDATA[RNS press release - News ]]> http://www.proactiveinvestors.co.uk/companies/rns/160526fogm3602/ Thu, 26 May 2016 07:00:00 +0100 http://www.proactiveinvestors.co.uk/companies/rns/160526fogm3602/ <![CDATA[News - Falcon shares set for Beetaloo boost if fracking programme proves a success ]]> http://www.proactiveinvestors.co.uk/companies/news/125964/falcon-shares-set-for-beetaloo-boost-if-fracking-programme-proves-a-success-125964.html The past three months have been stellar for Falcon Oil & Gas PLC (LON:FOG), whose shares are up 70% in a period when fellow explorers have struggled.

A lot of volume was seen in early April as investors cut their losses on certain AIM-listed stragglers and diverted what was left of their cash into the more exciting natural resources plays.

But what was it about Falcon that caught the eye, and more importantly, after the recent rapid ascent, does the stock have any further to go?

Falcon is sitting on US$12.7mln in cash, which would be enough to fund it through the next three years.

It is also fully carried on a drill programme in the highly prospective Beetaloo basin that’s worth US$200mln.

Here, it has 30% of what is shaping up to be an exciting gas project and is partnered with Aussie firm Origin Energy and South African gas to liquids specialist Sasol.

The Australian permits cover 4.6mln acres that are estimated to be host to 162 trillion cubic feet of gas.

The progress made to date has been significant, with operator Origin well ahead of where it expected to be when it drew up the work programme.

It is fair to say drilling to date on the Kalala and Amungee wells, which are 25km apart, have delivered the expected results. Importantly they confirmed the potential of the Middle Velkerri shale reservoir.

Key findings – such as the porosity and permeability, gas saturation and the pressure readings - point to something that, if it all hangs together, could be really special, analyst say.

In fact the Beetaloo could turn out to be the largest unconventional acreage outside the US.

That in itself goes some way to explaining the stampede of investors into the stock.

But what’s going to keep investors interested?

Near-term, preparations are underway to case the horizontal section of the Amungee well on the Beetaloo acreage. A multi- frack operation will then be carried out to assess the full potential of the shale.

It will be interesting to see the production reading once the horizontal frack is underway.

Investor bulletin boards are buzzing with all sorts of figures. 

Two million cubic feet a day looks a little fanciful, but anything around one million mark would have people sitting up and taking notice.

The horizontal frack is expected to get underway in early July.

Around the same time Origin will start spudding the Beetaloo W-1 vertical well, some 85 km south of the two earlier wells.

Obviously, this is more than a step out. So if the Middle Velkerri shale characteristics mirror those found in the earlier holes, the Beetaloo then becomes a very big deal.

Our sources suggest Origin will brief the industry’s movers and shakers on what it has discovered in Australia’s Northern Territory at Association of Petroleum Geologists’ annual shindig in Calgary, which takes place June 19-22.

This coincides with Falcon’s annual meeting in the Canadian city on June 21. Would it be too much to hope that Origin will be at this gathering too?

Anyway, drilling doesn’t end in July. No, after that the crew will head to the northern flank of the Beetaloo basin.

There in September it will target the shallower, condensate-rich mature sections of the Middle Velkerri.

While the hope is to uncover liquids there won’t be too much disappointment in the Origin-Sasol-Falcon camp if dry gas is discovered.

The decision then, as 2016 draws to a close, is whether to head north or south on the Beetaloo acreage to carry out second frack of the year.

That will all depend on the results of the two new verticals.

Looking at the broader picture, it is helpful to be a gas producer in Australia with rapacious neighbours in Asia ready to scoop up excess supply.

The obvious destination for Beetaloo production would be the US$34bn Inpex-Total liquefied natural gas trains under construction in Darwin.

That said a new 600km pipeline is being constructed that could carry output from the Northern Territory to Australia’s east coast conurbations.

Now, back to the question posed at the start of the article: is there enough excitement there to sustain interest and propel the shares further?

Well, the Falcon team would argue emphatically, yes there is.

One London broker, Cantor’s, probably provides a more objective assessment.

Its price target of 19p a share suggests the stock has a lot further to go from its current base of 8.35p – even after the recent spike.

“Our valuation illustrates that the market currently does not attribute value to a significant proportion of Falcon’s asset base despite attracting leading industry partners across its portfolio,” said analyst Sam Wahab in a recent research note.

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Mon, 16 May 2016 10:36:00 +0100 http://www.proactiveinvestors.co.uk/companies/news/125964/falcon-shares-set-for-beetaloo-boost-if-fracking-programme-proves-a-success-125964.html
<![CDATA[News - Falcon Oil & Gas figures boosted by settlement ]]> http://www.proactiveinvestors.co.uk/companies/news/125416/falcon-oil-gas-figures-boosted-by-settlement-125416.html Sharply reduced impairment charges meant Falcon Oil & Gas Ltd (LON:FOG CVE:FO) more or less broke even in 2015.

The hydrocarbon explorer received US$3.7mln from former partner Naftna Industrija Srbije (NIS) for contractual obligations at Hungary’s Mako Trough and these covered 2015's operating expenses of US$3.63mln. Net losses for the year were US$200,000 (US$31.7mln).

The numbers came out just a day after a comprehensive technical and operational update.

Drilling plans for 2016 are focused on its Australian shale interests and include recommissioning of Rig 185, stored at the Amungee NW-1H well site, is expected in mid-May with the well scheduled for re-entry in June.

Thereafter Amungee NW-1H, a horizontal well, will then undergo a multi-stage fracture stimulation programme to test the Middle Velkerri ‘B’ shale reservoir. The objective is to test the productivity of the gas in the shale.

Cash and equivalents at the year-end amounted to US$10.7mln.

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Fri, 29 Apr 2016 11:04:00 +0100 http://www.proactiveinvestors.co.uk/companies/news/125416/falcon-oil-gas-figures-boosted-by-settlement-125416.html
<![CDATA[RNS press release - Falcon Oil & Gas Ltd.: Full Year Results ]]> http://www.proactiveinvestors.co.uk/companies/rns/160429fogm5782/ Fri, 29 Apr 2016 07:00:00 +0100 http://www.proactiveinvestors.co.uk/companies/rns/160429fogm5782/ <![CDATA[Media files - A worry-free 12 months for Falcon Oil and Gas ]]> http://www.proactiveinvestors.co.uk/companies/stocktube/4964/a-worry-free-12-months-for-falcon-oil-and-gas-4964.html Thu, 28 Apr 2016 13:36:00 +0100 http://www.proactiveinvestors.co.uk/companies/stocktube/4964/a-worry-free-12-months-for-falcon-oil-and-gas-4964.html