Falcon Oil & Gas Ltd. announces that Origin Energy Limited presented a technical paper on the potential of the Kyalla Formation in the Beetaloo Sub-basin at the Australia Exploration Geoscience Conference (AEGC) in Sydney. The key conclusions by Origin are summarised below:

Kyalla Formation Evaluation
Reservoir and geomechanical analysis acquired at the Beetaloo W-1 well indicate the presence of two potential Source Rock Reservoir (“SRR”) intervals; the middle Kyalla SRR and the lower Kyalla SRR.

Geomechanical properties of the lower Kyalla SRR suggest it has the greater potential and could be conducive to successful hydraulic fracture stimulation.

Development of the lower Kyalla SRR, if viable, could have significant cost advantages over that of the middle Velkerri SRR due to expected lower drilling costs.

Mudgas and core analysis indicate the reservoir is likely to be wet gas which could also improve the economics considerably.

There is also the possibility that a successful lower Kyalla SRR test could lead to a ‘stacked’ play development with the middle Velkerri SRR. Infrastructure sharing synergies, with a greater portion of centralised infrastructure, could result in significant cost savings and an optimised surface footprint.

Further appraisal work is required to determine the deliverability of the identified Kyalla SRRs.

Philip O’Quigley, CEO of Falcon, commented:
“Today’s announcement is encouraging and follows the February 2017 Discovery Evaluation Report publication on the existence of a material gas resource in the middle Velkerri formation. We look forward to the Final Report from the scientific inquiry into hydraulic fracturing due to be published in March and the Northern Territory Government’s response to the Final Report before determining the forward exploration / appraisal program.”