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.