Thursday, June 22, 2023 7:44:37 AM
Falcon Oil & Gas shares take hit as 'skin' inhibits well test in Beetaloo project
04:05 Thu 22 Jun 2023
Jamie Ashcroft
Falcon Oil & Gas Ltd
AIM:FOG
TSX-V:FO
Falcon Oil & Gas Ltd - Falcon Oil & Gas shares take hit as 'skin' inhibits well test in Beetaloo project
Falcon Oil & Gas Ltd (AIM:FOG, TSX-V:FO) shares dropped by nearly a third in Thursday’s early deals after a new production test update informed investors that the Amungee NW-2H well, drilled in December and fracked in March, has yet to establish an "uninhibited production rate".
The company, in a technical update via RNS, said that independent analysis has found “a potential skin” that’s inhibiting the flow of gas from the stimulated shale – nevertheless, the well has been flowing gas, at a rate of around 0.83mln cubic feet per day plus 50 barrels per day of water.
It noted that this is the sixth well to be drilled and stimulated in the Beetaloo, in Australia’s Northern Territory, and that the joint venture partners believe the test results to date “are not indicative of the underlying production potential” of the Amungee NW-1H well.
Analysis is continuing with the partners assessing how they can potentially clean-up potential skin along with any potential learnings for future operations, Falcon added. Any possible clean up work would be carried out in the third quarter, it noted.
Two further wells are currently under consideration in the project for the remainder of this year, though these plans have yet to be formally approved among the partners.
Chief executive Philip O’Quigley, meanwhile, highlighted Falcon’s financial position which he described as “very strong”, with the company holding US$16mln of cash whilst its costs are also currently carried by its partners.
“Initial flow rates demonstrated from the A2H well to date do not reflect the true deliverability of the shale in the Amungee region … we continue to learn from how the shale is stimulated and performs under varying conditions,” O’Quigley said in a statement.
“Further analysis of all available data together with any clean-up work will hopefully yield more positive interpretation of the results obtained to date.”
In London, Falcon shares were down 3.2p or 32%, changing hands at 6.8p on Thursday.
North Bay Resources Announces 50/50 JV at Fran Gold Project, British Columbia; Initiates NI 43-101 Resources Estimate and Bulk Sample • NBRI • May 21, 2024 9:07 AM
Greenlite Ventures Inks Deal to Acquire No Limit Technology • GRNL • May 17, 2024 3:00 PM
Music Licensing, Inc. (OTC: SONG) Subsidiary Pro Music Rights Secures Final Judgment of $114,081.30 USD, Demonstrating Strength of Licensing Agreements • SONGD • May 17, 2024 11:00 AM
VPR Brands (VPRB) Reports First Quarter 2024 Financial Results • VPRB • May 17, 2024 8:04 AM
ILUS Provides a First Quarter Filing Update • ILUS • May 16, 2024 11:26 AM
Cannabix Technologies and Omega Laboratories Inc. enter Strategic Partnership to Commercialize Marijuana Breathalyzer Technology • BLO • May 16, 2024 8:13 AM