Amungee NW-2H Well Update
22/06/2023 07:00
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Falcon Oil & Gas Ltd.
(“Falcon” or “Company”)
Amungee NW-2H Well Update
22 June 2023 – Falcon Oil & Gas Ltd. (TSXV: FO, AIM: FOG) provides the
following update on operations at the Amungee NW-2H (“A2H”) in the
Beetaloo Sub-Basin, Northern Territory, Australia with Falcon Oil & Gas
Australia Limited’s joint venture partner, Tamboran (B2) Pty Limited
(“Tamboran”), collectively the joint venture (“JV”).
Background
In December 2022 the A2H well was drilled to a total depth (TD) of 3,883
metres, including a 1,275-metre horizontal section within the Amungee Member B
Shale, with a 25-stage stimulation programme completed across a 1,020 metre
horizontal section in March 2023. Operations to install production tubing were
completed in late-April 2023 and the well was subsequently re-opened in
preparation for production flow testing. This is only the sixth well drilled
and fracture stimulated in the Beetaloo Sub-basin to date.
Update on Flow Testing
* The A2H well achieved gas breakthrough, however, modelling and independent
third-party analysis from a US laboratory identified a potential skin
inhibiting the flow of gas from the stimulated shale. Despite this, the gas
has flowed at an average rate of 0.97 mmcf/d over 50 days with circa 10% of
the water used in the simulation programme recovered to date, well below other
wells in the basin.
* The JV believe flows from the well are yet to establish an uninhibited
30-day initial production rate.
* The well is currently producing approximately 0.83 mmcf/d and water recovery
is approximately 50 bbl/d with cumulative gas production and water recovery of
52.37 mmcf and 17,879 bbl, respectively.
* The hydrocarbon phases recovered are dry gas with 90.4% methane and 2.9%
ethane.
* The JV believes the results are not indicative of the underlying production
potential of the Amungee Member B Shale as the Amungee NW-1H well (“A1H”)
achieved flow rates of >5 mmcf/d over a normalised 1,000 metres from the same
well pad in 2021. Comparative details are included in the table below:
A2H A1H (full) * A1H ( flow) *
Stimulated Lat. Length (m) 1020 682 162
Stages 25 11 4
Proppant Volume (kbbls) 169 67 31
Proppant Tonnage (million pounds) 7.1 2.5 1.5
* (1)The A1H well was stimulated over a 682 - metre horizontal section in the Mid Velkerri “B Shale”. Following testing, the flow was determined to be flowing over four stages (stage 8 – 11). A1H (flow) shows flow across this smaller length. A1H (full) is over 1,000 metre)
* Results from the laboratory will continue to test fluid samples to determine
how the JV can potentially clean-up potential skin within the A2H well and
apply learnings going forward on future completion operations. Updates to the
market will be provided as further results and conclusions become available.
* Analysis is also being conducted to compare the completion and stimulation
design of the A2H well and the A1H fracture stimulation in 2016, which had a
production logging test completed in 2021, to establish the optimum approach
to future completion and fracture stimulation designs.
Forward Work Programme
The JV partners will continue to focus on interpreting the results to date and
completing the test and analysis work, to determine if there is clean-up work
that can be carried out on the A2H well in Q3 2023.
The JV is also considering undertaking a two well drilling programme in the
second half of this year which, once formally approved by the JV, will include
drilling a well at Shenandoah South (“SS1H”) in exploration permit 117, 60
kilometres south of A2H (from the same pad Kyalla 117 N2-1H ST2 was drilled)
in Q3 2023 targeting deeper acreage in the JV exploration permits followed by
drilling Amungee 3H (“A3H”), a well in close proximity to the existing two
Amungee wells.
Further details will be announced to the market once the JV has formally
approved the work program.
Philip O’Quigley, Falcon’s CEO, commented:
“Initial flow rates demonstrated from the A2H well to date do not reflect
the true deliverability of the shale in the Amungee region. Being the sixth
well drilled and stimulated within the Amungee member within the Beetaloo
Sub-basin, we continue to learn from how the shale is stimulated and performs
under varying conditions. Further analysis of all available data together with
any clean-up work will hopefully yield more positive interpretation of the
results obtained to date.
We look forward to being able to use all the learnings from this A2H well and
other work conducted in the Beetaloo Sub-basin to date in order to allow the
JV to design a modified drilling and completion programme for the proposed
upcoming two-well drilling program which hopefully will deliver a successful
outcome for our shareholders.
Falcon remains in a very strong financial position with circa US$16 million in
cash and remains carried for costs at this time.”
This announcement contains inside information.
Ends.
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
Cenkos Securities plc (NOMAD & Broker)
Neil McDonald / Derrick Lee +44 131 220 9771
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
exploration and development of 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.
Falcon Oil & Gas Australia Limited is a c. 98% subsidiary of Falcon Oil & Gas
Ltd.
For further information on Falcon Oil & Gas Ltd. please visit
www.falconoilandgas.com
About Tamboran B2 Pty Limited
Tamboran (B1) Pty Limited (“Tamboran B1”) is the 100% holder of Tamboran
B2 Pty Limited, with Tamboran B1 being a 50:50 joint venture between Tamboran
Resources Limited and Daly Waters Energy, LP (Sheffield).
Tamboran Resources Limited, is a natural gas company listed on the ASX (TBN)
and U.S. OTC markets (TBNNY). Tamboran is focused on playing a constructive
role in the global energy transition towards a lower carbon future, by
developing the significant low CO(2) gas resource within the Beetaloo Basin
through cutting-edge drilling and completion design technology as well as
management’s experience that in successfully commercialising unconventional
shale in North America.
Bryan Sheffield of Daly Waters Energy, LP is a highly successful investor and
has made significant returns in the US unconventional energy sector in the
past. He was Founder of Parsley Energy Inc. (“PE”), an independent
unconventional oil and gas producer in the Permian Basin, Texas and previously
served as its Chairman and CEO. PE was acquired for over US$7 billion by
Pioneer Natural Resources Company (“Pioneer”), itself a leading
independent oil and gas company and with the PE acquisition became a Permian
pure play company. Pioneer has a current market capitalisation of c. US$60
billion.
Glossary
bbl Barrels
bbl/d Barrels per day
Kbbl Kilobarrel
M Metres
Mmcf Million cubic feet
Mmcf/d Million cubic feet per day
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”, “consider” “potential”, “scheduled”,
“forecast”, “outlook”, “budget”, “hope”, “suggest”,
“support” “planned”, “approximately”, “potential” or the
negative of those terms or similar words suggesting future outcomes. In
particular, forward-looking information in this press release includes, but is
not limited to, information relating to the completion of the stimulation
programme, the execution of the fracture stimulation of the A2H well, the
prospectivity of the Amungee Member/Middle Velkerri play and the JV believing
the results are not indicative of the underlying production potential of the
Amungee Member B Shale, the JV working with laboratories on fluid samples to
determine how the JV can potentially clean-up potential skin with the A2H well
and apply learnings going forward, analysis to compare the completion and
stimulation design of the A2H well and the A1H fracture stimulation in 2016,
to establish the optimum approach to future completion and fracture
stimulation designs, JV believing flows from the well are yet to establish an
uninhibited 30-day initial production rate, the JV considering a two well
drilling programme at Shenandoah South and Amungee 3. This information is
based on current expectations that are subject to significant risks and
uncertainties that are difficult to predict. The risks, assumptions and other
factors that could influence actual results include 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, drilling wells is
speculative, often involving significant costs that may be more than estimated
and may not result in any discoveries; 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.
Any references in this news release to initial production rates are useful in
confirming the presence of hydrocarbons; however, such rates are not
determinative of the rates at which such wells will continue production and
are not necessarily indicative of long-term performance or ultimate recovery.
Readers are cautioned not to place reliance on such rates in calculating the
aggregate production for Falcon. Such rates are based on field estimates and
may be based on limited data available at this time.
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