Falcon Oil & Gas Shares Fall on Well Issues in Australia

By Adriano Marchese

Falcon Oil & Gas Ltd. (FO.V) shares fell in early trading on Monday in London after the company said the Kyalla 117 well in Australia will have to be drilled again following operational challenges with its first drill hole.

At 0907 GMT, shares in London were down 1.65 pence, or 13%, at 10.75 pence.

The Dublin-based company, which is listed in Canada and the U.K., said there were operational challenges maintaining adequate clean hole conditions and stability over portions of the horizontal production hole and it will need to be plugged.

The company said drilling will begin on a new horizontal hole within the next month, and that fracture stimulation will only occur after the drill is successfully completed and tests verity its integrity.

"Whilst it is unfortunate to have encountered these operational difficulties, which will add to the time and cost to drill the horizontal section, the joint venture remains as optimistic about the potential of the Kyalla and we look forward to updating the market with further updates in due course," Chief Executive Philip O'Quigley said.

Falcon has a 30% stake in the joint venture drilling the well, alongside majority holder Origin Energy Ltd. (ORG.AU).

Write to Adriano Marchese at [e-mail]

(END) Dow Jones Newswires

January 13, 2020 04:35 ET (09:35 GMT)

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