2021-06-22 06:03 ET - News Release

Mr. Philip O'Quigley reports

FALCON OIL & GAS LTD. - COMMENCEMENT OF THE 2021 WORK PROGRAMME - BEETALOO SUB-BASIN

Falcon Oil & Gas Ltd. has commenced the 2021 work program, starting with operations at Kyalla 117 N2-1H ST2 in the Beetaloo subbasin, Northern Territory, Australia, with its joint venture partner, Origin Energy B2 Pty. Ltd., a wholly owned subsidiary of Origin Energy Ltd.

On-site operations at Kyalla 117 have begun, with rigging up now complete and cleanup operations resumed. These operations, if successful, will result in an extended production test (EPT) being carried out to determine the expected longer-term performance of the well.

Further details on the 2021 work program, including proposed activity at Velkerri 76 and Amungee NW-1H, are set out below.

Kyalla 117

Kyalla shale play summary:

• Liquids-rich gas play, which has only been identified in the joint venture acreage;
• Material play fairway greater than 3,000 square kilometres with multi trillion-cubic-foot potential;
• Liquids-rich play with two prospective stacked targets in the gas window and one in the oil window. 

Results to date:

• As announced on Jan. 19, 2021, Origin submitted a notification of discovery and an initial report of discovery to the Northern Territory government.
• Unassisted gas flow rates ranging between 400,000 and 600,000 standard cubic feet per day were recorded over 17 hours, which are preliminary indications of well performance, and an EPT is required to determine the longer-term performance of Kyalla 117.

Velkerri 76

Velkerri shale play summary:

• Largest play fairway in the Beetaloo with four prospective stacked targets;
• Predominantly dry gas with OGIP (original gas in place) greater than 500 trillion cubic feet;
• Liquids-rich gas fairways on basin flanks with multitrillion-cubic-foot potential;
• Multiple successful tests within the dry gas window (Amungee NW-1H, Tanumbrini 1 and Shenandoah 1A). 

2021 work program includes:

• Targeting the Velkerri play along the southeastern flank of the Beetaloo subbasin, which is predicted to be in a liquids-rich gas window;
• Drill a vertical pilot well to acquire core, run logs and perform diagnostic fracture injection test data across the Velkerri.

Amungee NW-1H

Results to date:

• On Dec. 22, 2016, Falcon announced that, following a 57-day EPT of the well, production averaged 1.10 mmscf/d.
• On Feb. 15, 2017, Falcon announced that Origin had submitted the results of evaluation of the discovery and preliminary estimate of petroleum in place for the Amungee NW-1H Velkerri B shale gas pool to the Northern Territory government amounting to a gross contingent resource of 6.6 tcf, 1.46 tcf net to Falcon. 

2021 work program includes:

• An extended production test and production log to confirm zonal contribution, that is, determine if all frack stages contributed to the initial EPT conducted in 2016.

Philip O'Quigley, chief executive officer of Falcon, commented: "The commencement of operations at Kyalla 117 is an exciting first step for the planned 2021 work program, which will cover three different plays in the Beetaloo, providing key information that will help determine the future appraisal and development program. We look forward to providing results as soon as they become available."

This announcement has been reviewed by Dr. Gabor Bada, Falcon Oil & Gas's head of technical operations. Dr. Bada obtained his geology degree at the Eotvos L. University in Budapest, Hungary, and his PhD at the Vrije Universiteit Amsterdam, the Netherlands. He is a member of American Association of Petroleum Geologists.