On 12 October 2016 Falcon announced that Origin Energy Resources Limited (“Origin”), our Joint Venture partner, had submitted a notification of discovery and an initial report on discovery (“Notification of Discovery”) to the Department of Primary Industry and Resources of the Northern Territory, Australia (“DPIR”) on the Amungee NW-1H well in the Beetaloo Basin, Australia.

Subsequently, in 15 February 2017 Origin submitted the Results of Evaluation of the Discovery and Preliminary Estimate of Petroleum in Place for the Amungee NW-1H Velkerri B Shale Gas Pool (“Report”) to the Northern Territory Government and had also prepared a contingent gas resource estimate.

The submission followed the completion of extended production testing at the Amungee NW-1H exploration well of the “B Shale” member of the Middle Velkerri Formation.

Results of extended production test at Amungee NW-1H

Key Details of the Discovery Evaluation Report

The Report was submitted in compliance with Section 64 of the Northern Territory Petroleum Act (2016) and as per the Reporting a Petroleum Discovery Guideline. The Report follows the initial submission of the notification of discovery and an initial report on discovery in October 2016. The Report provides the following volumetric estimates and recovery / utilisation factor for the B Shale member of the Middle Velkerri Formation within permits EP76, EP98, and EP117.

Middle Velkerri B Shale Volumetric Estimates (1)

 Gross
Best Estimate
Net Attributable
Best Estimate
Area km216,1454,751
OGIP (TCF)496146
Combined Recovery / Utilisation Factor16%16%
Technically Recoverable Resource (TCF)8525
OGIP Concentration (BCF/km2)3131

1 The Report and estimates included in the table above were not prepared in accordance with COGEH

Understanding the factors controlling deliverability and recovery as well as spatial variation within the gas play/shale pool are in their infancy. A quantitative assessment of the aggregated estimated recoverable resource of the gas play that can handle these complexities will require a statistically significant number of wells testing the gas play. As there is only a single production test within the gas play Origin decided upon a qualitative assessment approach instead to estimate the technically recoverable resource.

Factors considered in the qualitative assessment of technically recoverable hydrocarbon resource in the gas play were the SRV recovery factor range, the subsurface utilization factor range and surface utilization factor range.

Contingent Gas Resource Estimates for the Middle Velkerri B Shale Pool within EP76, EP98 and EP117

Origin also prepared a contingent gas resource estimate using probabilistic methods and reservoir evaluation data, in addition to regional seismic data.

Assessment of 2C Contingent Gas Resource Estimates for the Middle Velkerri B Shale Pool within EP76, EP98 and EP117 as of 15 February, 20171

Measured and Estimated ParametersUnitsBest Estimate
Areakm21,968
Original Gas In Place (OGIP)TCF61.0
Gross Contingent ResourceTCF6.6
Net Contingent ResourceTCF1.94

1 Contingent resource estimates have been prepared on a statistical aggregation basis and in accordance with the Society of Petroleum Engineers Petroleum Management System (SPE-PRMS).  If the estimates were to be prepared in accordance with COGEH, Falcon is highly confident that there would be no change to the contingent resource estimates above.

For the full press release on the material gas resource please refer to -> Beetaloo_material_gas_resource.pdf