Falcon Oil & Gas upbeat after vertical drilling at Beetaloo

The AIM-traded firm said preliminary drilling data from the vertical section of the appraisal well confirmed the continuation of the regionally pervasive Kyalla Fm between the Beetaloo W-1 and Amungee NW-1H wells.

It also confirmed an elevated gas show, with relatively high C3, C4 and C5 components observed across the carbonaceous shales.

Other work carried out as part of the drilling operation included 45 metres of conventional coring being acquired in each of the Upper and Lower Kyalla reservoir sections, with sidewall cores and extensive wireline logging also acquired.

Falcon said the joint venture was now preparing to drill the horizontal section within the Kyalla formation, and would commence following the final evaluation of the vertical well results.

Once completed, the horizontal section would be fracture stimulated and production tested.

The board said the joint venture had prepared for continued operations during the wet season.

“Preliminary results of the Kyalla 117 N2-1 vertical appraisal well represents an excellent re-start to the Beetaloo drilling program,” said chief executive officer Philip O’Quigley.

“The election by the joint venture to immediately proceed to the drilling of the horizontal section signifies the joint venture’s confidence in the potential of the Kyalla shale.”

O’Quigley said that, while it was still early days to fully understand reservoir characteristics and completion quality, drilling results to date were “very encouraging”.

“Electric logs calibrated by core analysis results together with the planned fracture stimulation of the horizontal section will give us a more quantitative view on this play.

“We look forward to updating the market as soon as more results become available.”

At 1227 GMT, shares in Falcon Oil & Gas were up 5.06% at 13.03p.