Falcon Oil & Gas Ltd. (TSXV: FO, AIM: FOG) is pleased to announce that the Shenandoah South 1H (SS-1H) well in EP117 achieved commercial IP30 flow rate of 3.2 MMcf/d (normalised to 6.4 MMcf/d over 1,000 metres), significantly higher than pre-drill expectations.
Highlights are as follows:
- The SS-1H well in EP 117 achieved an average 30-day initial production (IP30) flow rate of 3.2 million cubic feet per day (MMcf/d) over the 1,644-foot (501 metres), 10 stage stimulated length within the Amungee Member B-Shale, normalised to 6.4 MMcf/d over 3,281-feet (1,000 metres).
- Results from the SS-1H well significantly exceeded pre-drill expectations and achieved what Falcon and its partners believe to be above the commercial threshold required to progress the Beetaloo to pilot development during 2024, subject to funding and key stakeholder approvals.
- Exit rate trajectory after the 30 days of flow testing showed a steady low declining curve at 2.9 MMcf/d over the stimulated length (normalised at 5.8 MMcf/d per 3,281 feet) and stable reservoir back pressure of 575 psi.
- The IP30 flow test extrapolates to ~19.5 MMcf/d for proposed future 10,000-foot (3,000 metres) development wells, in line with some of the highest flow rates achieved in the US Marcellus shale.
- The geological rock properties at SS1-H, indicative of favourable well performance, met or exceed that of the US Marcellus shale, including reservoir pressure, effective porosity and gas-in-place. This creates the potential to result in long-term, low decline gas production, ultimately leading to very significant estimated ultimate recovery per well (EUR).
- Results to date confirm that this region measuring more than 1 million gross acres below 8,850 feet (2,700 metres) is one of the best locations in the Beetaloo Basin to commence pilot development activities.
Flow testing of the SS-1H well will continue for the next 60 days to achieve average IP90 flow rates to better determine the well’s EUR. IP90 flow rate results are expected to be announced in April 2024.
- The Beetaloo JV Partners of Falcon and Tamboran B2 Pty Limited will now progress development plans for the proposed 40 MMcf/d Pilot Project at the Shenandoah South location. The project is expected to require six 10,000-foot development wells initially to achieve plateau production of 40 MMcf/d. Drilling of the first of these wells is planned to commence in Q2 2024 and the JV is targeting first gas in H1 2026.
- At the end of January 2024, Falcon held ~US$5 million in cash and has the benefit of a further A$16.67 million gross (~US$2.5 million net Falcon) carry to support immediate activities.
- Falcon is funded to commence drilling of the initial two wells in the program and will evaluate opportunities to support funding the remaining capital commitments to reach first production, including issuance of equity and/or debt, evaluation of pre-payment for gas from the proposed pilot project and potential farm-down opportunities.
Philip O’Quigley, CEO of Falcon commented:
“The IP30 flow rate announced today of 3.2 MMcf/d, normalised to 6.4 MMcf/d over 1,000 metres, are truly stellar and mark a major turning point in the Beetaloo Basin. Not only did the results exceed Falcon’s pre-drill commercial threshold of a normalised flow rate of 3 MMcf/d by more than 100% but the geological properties evidenced in this part of the Basin, including reservoir pressure, effective porosity and gas-in-place all point towards the significant resource potential of the Basin. We will continue flow testing the well for the next 60 days to achieve an IP90 flow rate which will better determine what that resource potential is.
We can now look forward with confidence to commencing the proposed 40 MMcf/d pilot development project which will start with the drilling of the first of six 10,000 ft development wells in Q2 2024, subject to stakeholder approval and funding, and look forward to updating the market as those plans begin to materialise.”