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Falcon Oil & Gas Ltd to drill Beetaloo in second quarter

The Australia, South Africa and Hungary-focused group said drilling preparations were at an advanced stage
Falcon Oil & Gas Ltd to drill Beetaloo in second quarter
Falcon said exploration activity in 2016 could transform the company

Falcon Oil & Gas Ltd (LON:FOG, CVE:FO) said it expected drilling at its Beetaloo basin project in Australia to start in the second quarter of this year.

Falcon, which also has interests in South Africa and Hungary, said preparations for the drilling programme at the site in the Northern Territory were at an advanced stage.

It was finalising drilling locations for two new vertical wells, which would penetrate condensate rich gas mature through to dry gas mature sections of the Middle Velkerri shale.

Tendering and contracting for hydraulic stimulation and key well services were ongoing.

Falcon Australia holds a 30% interest in 4.6 million gross acres in exploration permits 98, 76, and 117 covering most of the Beetaloo Basin.

Chief executive Philip O'Quigley said Falcon remains fully carried throughout on Beetaloo by its partners Origin Energy (ASX:ORG) and Sasol Petroleum Australia Limited.

"We are delighted to report that preparations for the 2016 Beetaloo drilling and testing programme are underway," he said.

"Our shareholders can look forward to another exciting year of exploration activity which has the potential to transform the value of the company."

Falcon also said it expected South African authorities to grant it a licence to explore for shale gas in the Karoo basin sometime in 2016.

The Petroleum Agency of South Africa recently confirmed it expects to finalise a recommendation to the country's mineral resources minister on Falcon's licence application by May.

Shares in Falcon fell 0.1p, or 2.1%, to 4.65p in early London trading.

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