The draft report from the scientific inquiry into fracking in Australia’s Northern Territory is in, and on first reading looks like good news for Falcon Oil & Gas Ltd (LON:FOG, CVE: FO) helping boost its share price on Tuesday.
Falcon is sitting on a major shale discovery in the Beetaloo basin though its recent progress has been halted by a moratorium on fracking.
A government-commissioned report is being produced in order to inform the government ahead of a decision to either allow or deny the controversial well stimulation technique.
The detailed final draft contains many points and recommendations, and the devil may be within the detail - for example, it calls for further "two-to-three year regional studies" into environmental issues such as the impact on human health, ecosystems and groundwater.
It is reported that those studies could be required before production operations are allowed but exploration and appraisal may be permitted sooner.
Nonetheless, for investors there are two immediate standout comments in the final draft.
Firstly, the report’s "overall conclusion" states the belief that “the challenges and risks associated with any onshore shale gas industry in the NT are manageable”.
The report added: “It is the panel's opinion that, provided that the recommendations made in this report are adopted and implemented, not only should the risk of any harm be minimised to an acceptable level, in some instances, it can be avoided altogether."
The final report will follow one further round of consultation, due to take place in January, and is expected to be published in March 2018.
In the meantime, investors may be heartened by the apparent positive conclusions of the scientific review although the decision on the moratorium might be a political rather than a scientific one.
Falcon shares were up around 9% in late afternoon trading on Tuesday, changing hands at 24.5p.
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