Falcon Oil & Gas Ltd.
Kyalla 117 N2-1H Horizontal Well Operational Update
13 January 2020 – Falcon Oil & Gas Ltd. (TSXV: FO, AIM: FOG) provides the following operational update on the drilling of the Kyalla 117 N2-1H well in the Beetaloo Sub-Basin, Australia.
The vertical section of the Kyalla 117 well was successfully and safely completed in late November 2019. Drilling of the horizontal production hole section with a target length of 1,000 to 2,000 metres, commenced in early December.
However, after reaching a horizontal length of 700 metres, operational challenges were experienced in maintaining adequate clean hole conditions and stability over portions of the horizontal production hole section appropriate to complete operations.
The initial horizontal production hole section will now be plugged in line with regulatory requirements. This will then be followed by sidetracking and drilling a new horizontal production hole section.
Plugging back and drilling a new horizontal section from an existing vertical well is not uncommon in an exploration drilling program such as this.
With the drilling rig and equipment on-site and in position, drilling operations will recommence on the new horizontal well section within the next month.
Fracture stimulation activity will only occur after the successful completion of drilling and the integrity of the well is tested and verified.
Results obtained from operations to date in the target shale formation demonstrate good reservoir continuity, conductive natural fractures, and continuous gas shows. The JV remains positive about the potential of the Lower Kyalla Formation, resulting in the decision to continue with drilling operations.
Philip O’Quigley, CEO of Falcon commented:
“Whilst it is unfortunate to have encountered these operational difficulties, which will add to the time and cost to drill the horizontal section, the JV remains as optimistic about the potential of the Kyalla and we look forward to updating the market with further updates in due course.”
|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
This announcement contains inside information.
About Origin Energy
Origin Energy (ASX: ORG) is a leading Australian integrated energy company. Origin is a leading energy retailer with approximately 4.1 million customer accounts, has approximately 6,000 MW of power generation capacity and is also a large natural gas supplier. Origin is the upstream operator of Australia Pacific LNG, which supplies natural gas to domestic markets and exports LNG under long term contracts.
Glossary of terms
JV Joint venture between Origin Energy 70% and Falcon Oil & Gas Australia Ltd. 30%
LNG Liquefied natural gas
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”, “potential”, “scheduled”, “forecast”, “outlook”, “budget”, “hope”, “support” or the negative of those terms or similar words suggesting future outcomes. This information is based on current expectations that are subject to significant risks and uncertainties that are difficult to predict. Such information may include, but is not limited to, comments made with respect to the type, number, schedule, stimulating, testing and objectives of the wells to be drilled in the Beetaloo Sub-basin Australia, the prospectivity of the Middle Velkerri and Kyalla plays and the prospect of the exploration programme being brought to commerciality, 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.
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.