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16 Aug 2018 | 09:30

Falcon Oil & Gas, Origin Energy agree to accelerate Beetaloo activity

Falcon Oil & Gas said Thursday it had amended its farm out agreement with Origin Energy to speed up exploration activity for the Beetaloo shale project.

Both parties deemed that the Stage 1 campaign was complete, and agreed to increase the portion of costs covered by Origin for Stage 2 campaign by A$15m to A$65m to accelerate the Stage 2 drilling programme.

'The JV has agreed that, following the success of the fracture stimulated horizontal well in 2016, accelerating into the Stage 2 horizontal drilling programme is far more beneficial than fracture stimulating the final vertical well under Stage 1,' the company said. Any portion of the additional budget not spent in Stage 2 would carry over into Stage 3, which is expected to get underway in 2019. 'Today's announcement is an exciting development for Falcon shareholders and is due to significant technical work carried out by Origin over the past 18 months,' said Philip O'Quigley, Falcon chief executive.

'The agreed acceleration of the work program into Stage 2 is technically driven and the A$15m cost cap increase provides Falcon with additional financial flexibility.'

'We are very excited about the upcoming drilling program with the objective of appraising and assessing commerciality of the prospective plays.'

At 9:30am: (LON:FOG) Falcon Oil Gas share price was +0.03p at 17.65p

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