Falcon Oil & Gas Ltd. Falcon Oil & Gas Ltd.: Acceleration Of Exploration And Appraisal Drilling Programme Into Stage 2

 
TIDMFOG 
 
 
   Falcon Oil & Gas Ltd. ("Falcon") 
 
   Acceleration of Exploration and Appraisal Drilling Programme into Stage 
2 
 
   16 August 2018 - Falcon Oil & Gas Ltd. (TSXV: FO, AIM: FOG, ESM: FAC) is 
pleased to announce it has signed an agreement to amend the Farm Out 
Agreement with Origin Energy B2 Pty Ltd ("Origin"), to deem Stage 1 of 
the exploration and appraisal drilling programme in the Beetaloo 
Sub-basin complete and to commence Stage 2 with a A$15 million increase 
to the Stage 2 Cost Cap. 
 
   Stage 1 Early Completion 
 
   Under the terms of the 2014 Farm-Out Agreement and Joint Operating 
Agreement (collectively "the Agreements") the joint venture parties 
("JV") drilled three vertical wells and one hydraulic fracture 
stimulated horizontal well. 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 
formal completion of Stage 1 is subject to government approval. 
 
   Stage 2 - A$15 million Cost Cap Increase 
 
   Under the Agreements, the original Stage 2 Cost Cap was approximately 
A$50m for the exploration and appraisal programme including the drilling 
and hydraulic fracture stimulation costs of two horizontal wells. With 
the removal of the fracture stimulation of the vertical well and 
accelerating the commencement of Stage 2, Origin has agreed to increase 
the Stage 2 Cost Cap by A$15 million, to approximately A$65 million. Any 
portion of the A$15 million increase not utilised during Stage 2 will 
transfer to the Stage 3 Cost Cap, which currently stands at A$48 
million. 
 
   Stage 2 Exploration and Appraisal Drilling Program 
 
   The JV has agreed to evaluate the potential of the liquids-rich gas 
fairways in both the Kyalla and Velkerri plays. Exploration and 
appraisal activities planned for 2019 include the drilling of one 
vertical well and the drilling and hydraulic fracture stimulation of two 
horizontal wells. Preparations for this drilling program has started. 
This will allow for the assessment of three plays, including the 
Velkerri B dry gas play discovered in 2016, so that the most 
commercially prospective play can be targeted during Stage 3. 
 
   Stage 3 Early Capital Commitments 
 
   The Stage 2 exploration and appraisal drilling programme will determine 
the most commercially prospective play to be targeted during Stage 3. 
The JV has agreed to the early commitment of Stage 3 capital expenditure 
during 2019, allowing for an efficient transition from Stage 2 to Stage 
3, in the case that Origin and Falcon agree to proceed to Stage 3. 
 
   Philip O'Quigley, CEO of Falcon, commented: 
 
   "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. 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." 
 
   For further information, please contact: 
 
   CONTACT DETAILS: 
 
 
 
 
Falcon Oil & Gas Ltd.                [phone] 
Philip O'Quigley, CEO               [phone] 
Anne Flynn, CFO                      [phone] 
 
Davy (NOMAD & Joint Broker) 
John Frain / Barry Murphy            [phone] 
 
RBC (Joint Broker) 
Matthew Coakes / Martin Copeland    [phone] 
 
 
   This announcement contains inside information. 
 
   Advisory regarding forward looking statements 
 
   Certain information in this press release may constitute forward-looking 
information. Any statements that are contained in this news release that 
are not statements of historical fact may be deemed to be 
forward-looking information. Forward-looking information typically 
contains statements with words such as "may", "will", "should", "expect", 
"intend", "plan", "anticipate", "believe", "estimate", "projects", 
"dependent", "potential", "scheduled", "forecast", "outlook", "budget", 
"hope", "support" or the negative of those terms or similar words 
suggesting future outcomes.  This information is based on current 
expectations that are subject to significant risks and uncertainties 
that are difficult to predict.  Such information may include, but is not 
limited to, comments made with respect to the type, number, schedule, 
stimulating, testing and objectives of the wells to be drilled in the 
Beetaloo basin Australia, the prospectivity of the Middle Velkerri play 
and the prospect of the exploration programme being brought to 
commerciality,  risks associated with fluctuations in market prices for 
shale gas; risks related to the exploration, development and production 
of shale gas reserves; general economic, market and business conditions; 
substantial capital requirements; uncertainties inherent in estimating 
quantities of reserves and resources; extent of, and cost of compliance 
with, government laws and regulations and the effect of changes in such 
laws and regulations; the need to obtain regulatory approvals before 
development commences; environmental risks and hazards and the cost of 
compliance with environmental regulations; aboriginal claims; inherent 
risks and hazards with operations such as mechanical or pipe failure, 
cratering and other dangerous conditions; potential cost overruns; 
variations in foreign exchange rates; competition for capital, equipment, 
new leases, pipeline capacity and skilled personnel; the failure of the 
holder of licenses, leases and permits to meet requirements of such; 
changes in royalty regimes; failure to accurately estimate abandonment 
and reclamation costs; inaccurate estimates and assumptions by 
management and their joint venture partners; effectiveness of internal 
controls; the potential lack of available drilling equipment; failure to 
obtain or keep key personnel; title deficiencies; geo-political risks; 
and risk of litigation. 
 
   Readers are cautioned that the foregoing list of important factors is 
not exhaustive and that these factors and risks are difficult to 
predict. Actual results might differ materially from results suggested 
in any forward-looking statements.  Falcon assumes no obligation to 
update the forward-looking statements, or to update the reasons why 
actual results could differ from those reflected in the forward 
looking-statements unless and until required by securities laws 
applicable to Falcon. Additional information identifying risks and 
uncertainties is contained in Falcon's filings with the Canadian 
securities regulators, which filings are available at www.sedar.com, 
including under "Risk Factors" in the Annual Information Form. 
 
   This announcement has been reviewed by Dr. Gábor Bada, Falcon Oil & 
Gas Ltd's Head of Technical Operations. Dr. Bada obtained his geology 
degree at the Eötvös L. University in Budapest, Hungary and 
his PhD at the Vrije Universiteit Amsterdam, the Netherlands. He is a 
member of AAPG. 
 
   About Falcon Oil & Gas Ltd. 
 
   Falcon Oil & Gas Ltd is an international oil & gas company engaged in 
the acquisition, exploration and development of conventional and 
unconventional oil and gas assets, with the current portfolio focused in 
Australia, South Africa and Hungary. Falcon Oil & Gas Ltd is 
incorporated in British Columbia, Canada and headquartered in Dublin, 
Ireland with a technical team based in Budapest, Hungary. 
 
   For further information on Falcon Oil & Gas Ltd. please visit 
www.falconoilandgas.com 
 
   About Origin Energy 
 
   Origin Energy (ASX: ORG) is the leading Australian integrated energy 
company. Origin is the leading energy retailer with approximately 4.2 
million customer accounts, has approximately 6,000 MW of power 
generation capacity and is also a large natural gas supplier. Origin is 
the upstream operator of Australia Pacific LNG, which supplies natural 
gas to domestic markets and exports LNG under long term contracts. 
 
   www.originenergy.com.au 
 
   Glossary of terms 
 
 
 
 
A$        Australian dollar 
Cost Cap  The costs up to which Origin has agreed to fund 100%. 
           Any costs incurred above the Cost Cap will be paid 
           70% by Origin and 30% by Falcon 
 
 
   Neither the TSX Venture Exchange nor its Regulation Services Provider 
(as that term is defined in the policies of the TSX Venture Exchange) 
accepts responsibility for the adequacy or accuracy of this release. 
 
   This announcement is distributed by Nasdaq Corporate Solutions on behalf 
of Nasdaq Corporate Solutions clients. 
 
   The issuer of this announcement warrants that they are solely 
responsible for the content, accuracy and originality of the information 
contained therein. 
 
   Source: Falcon Oil & Gas Ltd. via Globenewswire 
 
 
  http://www.falconoilandgas.com/ 
 

(END) Dow Jones Newswires

August 16, 2018 02:00 ET (06:00 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.