FALCON Oil & Gas has raised £7 million (A$13 million) through a share placement of 50.5 million shares at £0.14 (26c) per share on the London Stock Exchange, which it will use to fund its share of further drilling and appraisal work in the Beetaloo Sub-basin in the Northern Territory.
The Ireland headquartered oiler has a 30% stake in the unconventional play which consists of three permits (EO76, EP98 and EP117) alongside Australia's Origin Energy which owns the remaining 70%.
Falcon and Origin are expected to bring drilling the next well in its exploration campaign as early as next month.
To date the joint venture has drilled four wells under the stage one work program, which resulted in the discovery of 6.6 trillion cubic feet of 2C gross contingent resources.
A 57 day extended well test resulted in cumulative production of 63 million cubic feet of gas and flow rated of 0.8-1.2MMcf of gas per day.
The focus will be on the liquids-rich Kyalla Formation and Velkerri Shale.
Origin and Falcon have now agreed to evaluate the potential of the liquids-rich gas fairways in both the Kyalla and Velkerri shales as part of the stage two work program, and plan to drill a further four horizontal wells mid this year.
Under the stage two work program two wells will also be fracced. A third stage work program is planned for 2020.
The estimated gross capital expenditure for stage two and stage three is US$130 million. Under the terms of the Farm-out Agreement, Falcon Australia is carried for up to A$113 million (US$80 million) for the costs of Stage two and Stage three, equating to US$24 million net benefit to Falcon, with Falcon's net cash contribution estimated at US$15 million, before contingency.
"Falcon is delighted with the proposed placing to conditionally raise £7 million. This placing will see the company being adequately funded through the next US$100 million of capital expenditure on the Beetaloo project," Falcon chief executive Phillip O'Quigley said.
"Preparations continue for the recommencement of drilling of stage two in mid-2019, which will include the drilling and hydraulic fracture stimulation of two horizontal wells, and we look forward to updating the market in due course."
Source: Energy News Bulletin
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