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Highlights
- Falcon Oil & Gas, in partnership with Tamboran, commences stimulation at S2-2H ST1 and S2-4H wells.
- Falcon reduces its participation in the Shenandoah South Pilot Project, significantly lowering 2025 capital expenditure.
- Liberty Energy mobilized to execute the stimulation campaign for the Beetaloo JV partners.
Falcon Oil & Gas Ltd. (TSXV:FO, AIM: FOG) is pleased to announce 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. This major milestone is part of Falcon's joint venture with Tamboran (B2) Pty Limited, known as the Beetaloo JV partners. The stimulation campaign will target the horizontal sections of the two wells: S2-2H ST1, which has a horizontal section of 1,654 metres (5,427 feet), and S2-4H, with a horizontal section of 2,977 metres (9,766 feet).
Liberty Energy (NYSE:LBRT) is responsible for carrying out the stimulation campaign and has already mobilized the necessary equipment and sand to the location. The well stimulation follows a successful drilling campaign, with strong gas shows and promising data observed during drilling. Falcon is optimistic about the stimulation's potential to enhance production and unlock the full value of the Shenandoah wells.
Key Highlights of the Reduced Participating Interest
Alongside the stimulation campaign, Falcon has elected to reduce its participating interest (PI) in the remaining four wells of the Shenandoah South Pilot Project ("Pilot"). The reduction in Falcon’s participation from 5% to 0% for these wells will significantly lower the company’s 2025 capital expenditures.
Falcon previously participated in the Shenandoah S-1H well in 2023 with a 22.5% PI, which contributed to the creation of a Drill Spacing Unit (DSU) of 20,480 acres. For the 2024 drilling of the S2-2H ST1 and S2-4H wells, Falcon reduced its PI to 5%, resulting in the formation of two DSUs totaling 46,080 acres. The Beetaloo JV partners are working to consolidate acreage in the area, forming the First Strategic Development Area (FSDA), which will incorporate Falcon’s existing acreage and additional DSUs that may be created as part of the Pilot.
Depending on the final size of the FSDA, Falcon’s participation entitlement in the area post-Pilot could increase to up to 10%. Despite reducing its PI in the next phase of drilling, Falcon retains a 22.5% PI in the remaining 4.52 million acres of the Beetaloo Sub-Basin, which represents approximately 1 million acres net to Falcon. This continued interest in the region ensures Falcon remains well-positioned to benefit from the success of the Beetaloo.
CEO Statement on the Stimulation Campaign and Strategic Adjustments
Philip O’Quigley, CEO of Falcon, commented on the developments: "We are extremely encouraged about the potential of the current stimulation program based on the strong gas shows and other data observed whilst drilling both wells. We are confident that Liberty Energy, with its extensive experience, will provide us with the best opportunity for optimal outcomes from this program. We look forward to updating the market on the IP30 flow test results once they become available."
He continued, "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 flexibility offered by the DSUs, allowing Falcon to strategically allocate capital while still being well-positioned to capture the potential success of the Beetaloo."
