Falcon Oil & Gas Ltd. Falcon Oil & Gas Ltd.: Acceleration Of Exploration And Appraisal Drilling Programme Into Stage 2
16 August 2018 - 4:00PM
UK Regulatory
TIDMFOG
Falcon Oil & Gas Ltd. ("Falcon")
Acceleration of Exploration and Appraisal Drilling Programme into Stage
2
16 August 2018 - Falcon Oil & Gas Ltd. (TSXV: FO, AIM: FOG, ESM: FAC) is
pleased to announce it has signed an agreement to amend the Farm Out
Agreement with Origin Energy B2 Pty Ltd ("Origin"), to deem Stage 1 of
the exploration and appraisal drilling programme in the Beetaloo
Sub-basin complete and to commence Stage 2 with a A$15 million increase
to the Stage 2 Cost Cap.
Stage 1 Early Completion
Under the terms of the 2014 Farm-Out Agreement and Joint Operating
Agreement (collectively "the Agreements") the joint venture parties
("JV") drilled three vertical wells and one hydraulic fracture
stimulated horizontal well. The JV has agreed that, following the
success of the fracture stimulated horizontal well in 2016, accelerating
into the Stage 2 horizontal drilling programme is far more beneficial
than fracture stimulating the final vertical well under Stage 1. The
formal completion of Stage 1 is subject to government approval.
Stage 2 - A$15 million Cost Cap Increase
Under the Agreements, the original Stage 2 Cost Cap was approximately
A$50m for the exploration and appraisal programme including the drilling
and hydraulic fracture stimulation costs of two horizontal wells. With
the removal of the fracture stimulation of the vertical well and
accelerating the commencement of Stage 2, Origin has agreed to increase
the Stage 2 Cost Cap by A$15 million, to approximately A$65 million. Any
portion of the A$15 million increase not utilised during Stage 2 will
transfer to the Stage 3 Cost Cap, which currently stands at A$48
million.
Stage 2 Exploration and Appraisal Drilling Program
The JV has agreed to evaluate the potential of the liquids-rich gas
fairways in both the Kyalla and Velkerri plays. Exploration and
appraisal activities planned for 2019 include the drilling of one
vertical well and the drilling and hydraulic fracture stimulation of two
horizontal wells. Preparations for this drilling program has started.
This will allow for the assessment of three plays, including the
Velkerri B dry gas play discovered in 2016, so that the most
commercially prospective play can be targeted during Stage 3.
Stage 3 Early Capital Commitments
The Stage 2 exploration and appraisal drilling programme will determine
the most commercially prospective play to be targeted during Stage 3.
The JV has agreed to the early commitment of Stage 3 capital expenditure
during 2019, allowing for an efficient transition from Stage 2 to Stage
3, in the case that Origin and Falcon agree to proceed to Stage 3.
Philip O'Quigley, CEO of Falcon, commented:
"Today's announcement is an exciting development for Falcon shareholders
and is due to significant technical work carried out by Origin over the
past 18 months. The agreed acceleration of the work program into Stage 2
is technically driven and the A$15m cost cap increase provides Falcon
with additional financial flexibility. We are very excited about the
upcoming drilling program with the objective of appraising and assessing
commerciality of the prospective plays."
For further information, please contact:
CONTACT DETAILS:
Falcon Oil & Gas Ltd. +353 1 676 8702
Philip O'Quigley, CEO +353 87 814 7042
Anne Flynn, CFO +353 1 676 9162
Davy (NOMAD & Joint Broker)
John Frain / Barry Murphy +353 1 679 6363
RBC (Joint Broker)
Matthew Coakes / Martin Copeland +44 20 7653 4000
This announcement contains inside information.
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 basin Australia, the prospectivity of the Middle Velkerri play
and the prospect of the exploration programme being brought to
commerciality, risks associated with fluctuations in market prices for
shale gas; risks related to the exploration, development and production
of shale gas reserves; general economic, market and business conditions;
substantial capital requirements; uncertainties inherent in estimating
quantities of reserves and resources; extent of, and cost of compliance
with, government laws and regulations and the effect of changes in such
laws and regulations; the need to obtain regulatory approvals before
development commences; environmental risks and hazards and the cost of
compliance with environmental regulations; aboriginal claims; inherent
risks and hazards with operations such as mechanical or pipe failure,
cratering and other dangerous conditions; potential cost overruns;
variations in foreign exchange rates; competition for capital, equipment,
new leases, pipeline capacity and skilled personnel; the failure of the
holder of licenses, leases and permits to meet requirements of such;
changes in royalty regimes; failure to accurately estimate abandonment
and reclamation costs; inaccurate estimates and assumptions by
management and their joint venture partners; effectiveness of internal
controls; the potential lack of available drilling equipment; failure to
obtain or keep key personnel; title deficiencies; geo-political risks;
and risk of litigation.
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.
This announcement has been reviewed by Dr. Gábor Bada, Falcon Oil &
Gas Ltd's Head of Technical Operations. Dr. Bada obtained his geology
degree at the Eötvös L. University in Budapest, Hungary and
his PhD at the Vrije Universiteit Amsterdam, the Netherlands. He is a
member of AAPG.
About Falcon Oil & Gas Ltd.
Falcon Oil & Gas Ltd is an international oil & gas company engaged in
the acquisition, exploration and development of conventional and
unconventional oil and gas assets, with the current portfolio focused in
Australia, South Africa and Hungary. Falcon Oil & Gas Ltd is
incorporated in British Columbia, Canada and headquartered in Dublin,
Ireland with a technical team based in Budapest, Hungary.
For further information on Falcon Oil & Gas Ltd. please visit
www.falconoilandgas.com
About Origin Energy
Origin Energy (ASX: ORG) is the leading Australian integrated energy
company. Origin is the leading energy retailer with approximately 4.2
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 Australia Pacific LNG, which supplies natural
gas to domestic markets and exports LNG under long term contracts.
www.originenergy.com.au
Glossary of terms
A$ Australian dollar
Cost Cap The costs up to which Origin has agreed to fund 100%.
Any costs incurred above the Cost Cap will be paid
70% by Origin and 30% by Falcon
Neither the TSX Venture Exchange nor its Regulation Services Provider
(as that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.
This announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the information
contained therein.
Source: Falcon Oil & Gas Ltd. via Globenewswire
http://www.falconoilandgas.com/
(END) Dow Jones Newswires
August 16, 2018 02:00 ET (06:00 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
Falcon Oil & Gas (LSE:FOG)
Historical Stock Chart
From Apr 2024 to May 2024
Falcon Oil & Gas (LSE:FOG)
Historical Stock Chart
From May 2023 to May 2024