Falcon Oil & Gas has announced the commencement of the stimulation campaign at the Shenandoah S2-2H ST1 and Shenandoah S2-4H wells in the Beetaloo Sub-Basin, Northern Territory, Australia with Falcon's joint venture partner, Tamboran (B2).
Key Highlights of the Stimulation Campaign
- Stimulation campaign will be completed across:
- S2-2H ST1’s horizontal section of 1,654 metres (5,427 feet) and;
- S2-4H’s horizontal section of 2,977 metres (9,766 feet).
- Liberty Energy (NYSE: LBRT) who mobilised equipment and sand to location before the end of last year will carry out the stimulation campaign on behalf of the Beetaloo JV partners.
Shenandoah South Pilot Project
For the next drilling phase of the Pilot, which involves the drilling and stimulation of the remaining four wells, Falcon has elected to reduce its participating interest (“PI”) from 5% to 0%.
Key Highlights of the Reduced Participating Interest
- The election by Falcon to reduce its PI to 0% in the remaining four wells of the Pilot will significantly reduce it’s 2025 capital expenditure.
- Falcon participated in the Shenandoah S-1H well in 2023 at its 22.5% PI which created a Drill Spacing Unit (“DSU”) of 20,480 acres.
- Falcon participated in the S2-2H ST1 and the S2-4H wells in 2024 at its reduced 5% PI which created two DSU’s totalling 46,080 acres.
- The Beetaloo JV partners are planning on creating an enlarged area around the Pilot, known as the First Strategic Development Area (“FSDA”), which would amalgamate the acreage and PIs from the DSUs mentioned above and any further DSUs that may be created as part of the Pilot
- Depending on the ultimate size of the planned FSDA Falcon’s combined participation entitlement in the FSDA post the Pilot could be up to 10%.
- Falcon also retains a 22.5% PI in the remaining 4.52 million acres in the Beetaloo, net 1 million acres to Falcon.
Philip O’Quigley, CEO of Falcon commented:
'We are extremely encouraged about the potential of the current stimulation program based on strong gas shows and other data observed whilst drilling both wells. In addition, we are very confident that the experienced US operator, Liberty Energy, will provide us with the greatest opportunity for the best possible outcome from this stimulation program. We look forward to updating the market on the IP30 flow test results as soon as they become available.
Reducing our participation in the next four wells has a minimal impact on our overall interest in the Beetaloo which remains at 22.5%. This demonstrates the optionality afforded by the DSUs, which enable Falcon to strategically and efficiently deploy its capital. This reduction in our participation in the next four wells significantly reduces our 2025 capital expenditure whilst at the same time leaving us very well positioned to capture the overall success of the Beetaloo.'
Background
Falcon Oil & Gas Australia is a c.98% owned subsidiary of Falcon Oil & Gas.
Falcon Australia is one of the two registered holders of approximately 4.6 million gross acres (~ 18,619 km2), 1 million net acres, of three Exploration Permits (EP 76, EP98 and EP117) in the Beetaloo Sub-basin, Northern Territory, Australia with Tamboran (B2) Pty Limited appointed as operator for the joint venture. The Beetaloo Sub-basin is located 600 kilometres south of Darwin, close to infrastructure including a highway, a pipeline and a railway, offering transport options to the Australian market and beyond via the existing and developing liquified natural gas capacity in Darwin.
The Beetaloo Sub-basin is a Proterozoic and Cambrian tight oil and gas basin. In its entirety, the Beetaloo Sub-basin covers approximately 8.7 million acres (~ 35,260 km2) and is a relatively underexplored onshore exploration basin. The area is also remote and sparsely populated. Considering all these factors, the Board believes the Beetaloo Sub-basin has shale oil and shale gas potential.
Source: Falcon Oil & Gas
