Falcon Oil & Gas Ltd. - Beetaloo Farm-Out
- With the necessary approvals, the PI of the respective JV partners will be:
- Origin 77.5%
- In consideration of Falcon Australia transferring 7.5% of its PI, Origin will increase the gross cost cap of the work program by
- The previous farm-in arrangement included a Stage 2 gross cost cap of
A$65.3 millionand a Stage 3 gross cost cap of A$48 million, or A$113.3 millionin total. Under the Agreements, the Stage 2 and Stage 3 gross cost caps will be combined and increased by A$150.5 millionto A$263.8 million(the “Overall Cost Cap”),
- This Overall Cost Cap will be applied to the completion of the Stage 2 and Stage 3 work programmes.
- Amounts of the Overall Cost Cap not utilised during Stage 2 and Stage 3 will be applied to future work programmes.
- Expenditure above the Overall Cost Cap will be borne by the JV partners in proportion to their PI.
- Origin will assume 25% of the cost of Falcon Australia’s remaining call option to reduce the overriding royalties with the
TOG Group. The cost to Falcon Australia, should it wish to exercise the call option, will reduce from US$7.5 millionto US$5.625 million, in line with its reduced PI.
Drilling operations on the Kyalla 117 N2-1H ST2 well (“Kyalla Well”) were successfully completed in
Philip O’Quigley, CEO of Falcon commented:
“Falcon Australia’s farm down of 7.5% of its PI in the Permits for a further gross cost cap of
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About Origin Energy
Origin Energy (ASX: ORG) is a leading Australian integrated energy company. Origin is a leading energy retailer with approximately 4.1 million customer accounts, has approximately 6,000 MW of power generation capacity and is also a large natural gas supplier. Origin is the upstream operator of
Glossary of terms
|Cost Cap||The costs up to which Origin has agreed to fund 100%. Any costs incurred above the Cost Cap will be paid 77.5% by Origin and 22.5% by Falcon Australia|
|H1||First six months of the calendar year|
|H2||Second six months of the calendar year|
|Joint venture between Origin Energy and |
|LNG||Liquefied natural gas|
|Stage 2||Drilling operations include the drilling and hydraulic fracture stimulation of two horizontal wells to evaluate the potential of liquids rich gas fairways in the Kyalla and Velkerri shale plays|
|Stage 3||Drilling operations include the drilling and hydraulic fracture stimulation of two horizontal wells to prove flow rates of gas/liquids that provide a range of commercialisation options|
Advisory regarding forward looking statements
Certain information in this press release may constitute forward-looking information. Any statements that are contained in this news release that are not statements of historical fact may be deemed to be forward-looking information. Forward-looking information typically contains statements with words such as “may”, “will”, “should”, “expect”, “intend”, “plan”, “anticipate”, “believe”, “estimate”, “projects”, “dependent”, “potential”, “scheduled”, “forecast”, “outlook”, “budget”, “hope”, “support” or the negative of those terms or similar words suggesting future outcomes. This information is based on current expectations that are subject to significant risks and uncertainties that are difficult to predict. Such information may include, but is not limited to, comments made with respect to the type, number, schedule, stimulating, testing and objectives of the wells to be drilled in the Beetaloo Sub-basin
Readers are cautioned that the foregoing list of important factors is not exhaustive and that these factors and risks are difficult to predict. Actual results might differ materially from results suggested in any forward-looking statements. Falcon assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward looking-statements unless and until required by securities laws applicable to Falcon. Additional information identifying risks and uncertainties is contained in Falcon’s filings with the Canadian securities regulators, which filings are available at www.sedar.com, including under "Risk Factors" in the Annual Information Form.
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