Falcon Oil & Gas has announced thatit has elected to reduce its working interest in the proposed Shenandoah South Pilot Project from 22.5% to 5%. This optimises Falcon’s interest in the Beetaloo, since Falcon will only have to pay for 5% of the costs of the two wells to be drilled in 2024 as part of the Pilot but will still retain a 10% working interest in the enlarged area of circa 72,000 acres around the Pilot and a 22.5% working interest in the remaining 4.52 million acres.
Key Highlights
- The election by Falcon to reduce its working interest to 5% will significantly reduce Falcon’s cost to participate in the Pilot.
- Falcon also retains the benefit of a further A$16.67m (US$11m) of gross carry that will be used to offset against the costs of the Pilot in 2024, thereby further reducing Falcon’s cost to participate.
- Falcon participated in the SS1-H well in 2023 at its 22.5% working interest which created a Drill Spacing Unit ('DSU') of 20,480 acres.
- The two wells in the 2024 drilling program will create two new DSU’s totalling 51,200 acres in which Falcon will participate and retain a working interest at 5%.
- Falcon’s combined weighted average ownership and future participation entitlement of this enlarged area of 72,000 acres post the Pilot will be 10%.
- Falcon retains its full 22.5% participation interest in the remaining 4.52 million acres in the Beetaloo, net 1 million acres to Falcon.
Philip O’Quigley, CEO of Falcon commented:
'Falcon’s election to reduce its participating interest to 5% in the Pilot is a prudent use of our capital resources as it significantly reduces our cost exposure. Post a successful Pilot, Falcon will own a weighted average interest of 10% in the enlarged area of around 72,000 acres around the Pilot and will be able to participate in any future development of this area, whilst still retaining 22.5% interest in the remaining 4.52 million acres. This election by Falcon demonstrates our ability to optimise our interest in the Beetaloo for the benefit of shareholders'.
EP 98/117 interests
| Company | Interest |
| Tamboran (B2) Pty Limited | 77.5% |
| Falcon Oil and Gas Australia Limited (Falcon) | 22.5% |
| Total | 100.0% |
Shenandoah South-1 DSU – 20,480 acres
| Company | Interest |
| Tamboran (B2) Pty Limited | 77.5% |
| Falcon Oil and Gas Australia Limited (Falcon) | 22.5% |
| Total | 100.0% |
Shenandoah South-2 DSU – 51,200 acres
| Company | Interest |
| Tamboran (B2) Pty Limited | 95.0% |
| Falcon Oil and Gas Australia Limited (Falcon) | 5.0% |
| Total | 100.0% |
Source: Falcon Oil & Gas
