It's been quiet here for a while but things should start getting interesting again real soon. Just need Gunner to light the fuse by lifting the moratorium, and that decision could come any time now
Judge clears way for Falcon’s $100m drill plan
April 2, 2018
Source: The Irish Times
A drilling programme valued at Aus$100m (€62.3m) is set to quickly resume at a huge gas prospect part-owned by Irish exploration company Falcon Oil & Gas after an Australian judge recommended the lifting of a fracking ban.
The Dublin-headquartered company, led by exploration veteran Philip O’Quigley, saw its share price jump briefly last week before giving up its gains following the publication of the long-awaited report by Justice Rachel Pepper.
The report called for the lifting of the fracking ban, subject to conditions, but it now falls to the local Northern Territories government to make the final decision.
The chief minister of the province indicated that his government would decide within weeks whether to accept the report and lift the moratorium on fracking. When the government implemented the temporary ban in September 2016 it cast major uncertainty over the value of Falcon’s potentially massive shale gas find in the Beetaloo Basin. Falcon has previously claimed the find could be up to 100 times the size of Ireland’s Corrib gas field and is comparable to some of the biggest shale gas fields in the world.
Falcon owns a 30pc share of the gas field, 600 miles south of Darwin, having farmed out a stake to Australia’s largest energy player Origin. In exchange, Origin agreed to fully carry a AUS$200m (€124.6m) development programme at the gas field but this was halted half way through by the moratorium.
“Justice Pepper’s report is a great result and amazingly comprehensive. In my view it should make the government’s decision making process easy,” said O’Quigley. “But we now have to wait and see what they come back with.”
If the moratorium is lifted as recommended “that is where it gets very exciting,” he said. “We have a super project, a great partner in Origin, AUS$100m of a AUS$200m drilling programme still to be spent by our partner over the next two to three years. The prize here has just got bigger and bigger even since we announced our discovery in February 2017 with promising new target areas.”
Northern Territories chief minister Michael Gunner, who ordered the moratorium and judicial review to fulfil promises made in his 2016 election manifesto, told Australian radio that his government would provide certainty on the matter as soon as possible and that he had “cleared his diary” to consider whether or not to lift the ban.
O’Quigley said this continuing uncertainty was one reason why Falcon’s share price had not jumped as much as brokers have previously predicted if the exploration project gets clearance.
“People do not invest in political risk no matter where it is in the world because you cannot quantify it,” said O’Quigley. “You can never determine what politicians are going to do but the report is quite an emphatic piece of work that makes it easy for them to deliver a result that is good for everyone.
“One of the big fears that we had was that there would be a pause for several years to undertake monitoring and baseline assessments, but the report actually addresses that and says that most of those things can be run in parallel.”
O’Quigley said Falcon’s strategy is to see through the current drilling programme, which is being paid for by its partner, and that it will then consider selling its share to a bigger company.
“We have never made any secret about the fact that we want to build this asset up to a value and then look to exit. If we stayed in we would have to go to the market in two or three years time to look for money for major capex, or at that stage we could sell the company. I don’t know of any shareholder who would be against selling so long as we get the kind of value that we believe we can generate in the next two to three years.”
Source :
Independent
weekly.com/business/oil-gas-mining/judge-clears-way-for-falcons-100m-drill-plan/
