DENVER, CO, Nov. 14, 2011 /CNW/ - Falcon Oil & Gas, Ltd. (TSXV: FO) (the
"Company", "Falcon") announced today that the full testing program has
been successfully carried out on the Shenandoah-1 well in the Beetaloo
Basin, Australia, with gas being produced from each of the shale
intervals tested. Both Velkerri intervals are now considered candidates
for future testing, including horizontal drilling with multiple
stimulation treatments to establish commerciality, with the other
intervals subject to further evaluation.
Shenandoah-1 is within the 100,000 acre area that is under the sole
ownership of Falcon Oil & Gas Australia Ltd. and is not part of the
acreage included in the joint venture with Hess Australia (Beetaloo)
Pty. Ltd. ("Hess"), as described in the July 13, 2011 press release.
Under the terms of that arrangement however, Hess will be provided
copies of data obtained from the testing and completion, for which the
Company will receive $2 million.
Shenandoah-1 is a vertical well situated in the deepest part of the
basin and natural gas was the expected hydrocarbon at the depths being
tested. The well is the first to be tested in these unconventional
targets, consequently the objectives of the tests were to determine
whether the shale intervals could be fracture-stimulated and whether
they could produce hydrocarbons, and to confirm rock, pressure and
fluid properties. The operation has succeeded in these objectives and
the well will now be plugged and abandoned to the highest environmental
The Shenandoah-1 tests were not designed for long-term testing with full
clean-up of fluids, but rather to test for hydrocarbon production to
surface over a period of four to six days and to gather the maximum
information possible before moving on to the next interval according to
program. For this reason and because these are shale zones in a
vertical well with single stimulation treatments, high flowrates were
not expected as mentioned in the press release dated September 16,
Five intervals were tested in accordance with the program. The gathered
information is still to be fully interpreted for planning future
appraisal and exploration operations, however the following preliminary
comments can be made at this time:
Three of the five intervals flowed gas while still recovering
significant amounts of frac fluid.
The most positive results came from the Middle Velkerri shales where
there was no indication of formation water being produced. The
sustained gas rates ranged between 50 and 100 mscfpd (thousand standard
cubic feet per day), gas gravities ranged from 0.64 to 0.70 and the
lower interval also yielded condensate with an API gravity of 43
degrees. Importantly this showed that that these rocks can be
stimulated and are over pressured. Both Velkerri intervals will now be
considered candidates for future testing, including horizontal drilling
with multiple stimulation treatments to establish commerciality.
The Lower Kyalla shale also produced gas to surface and will now be
considered for further exploratory investigation.
Two separate intervals were perforated in the Moroak sandstones. They
were not stimulated but rather were conventional perforation tests,
intended to find out if the rocks were gas-bearing and to provide
technical information. Little to no commercial hydrocarbons were
present. The test did however provide valuable rock property
information as the Moroak is target of interest elsewhere in the
Beetaloo Basin as a conventional play.
The Upper Kyalla shale is oil-bearing in Shenandoah-1 but was not tested
due to wellbore configuration.
Further evaluation of the extensive information gathered in this
wellbore is now required before considering follow-up vertical and
horizontal exploration wells. In order to locate future wells optimally
it is likely that some additional seismic lines will need to be
acquired in the Shenandoah area.
Falcon CEO Robert Macaulay commented, "I am very pleased with the
results of the Shenandoah-1 well test. The Velkerri results support our
belief in recoverable hydrocarbons in the deepest part of the Beetaloo
Basin. They also prove that these particular shales can be fracture
stimulated which is a crucial first step in the exploration and
appraisal process. The Moroak sandstones continue to be a target of
interest and the information gained from testing will help with
prospecting for these targets elsewhere in the Basin. The Lower Kyalla
result is likewise encouraging, we will be working through the data to
understand it better before committing our plans to paper on the next
steps. Finally, a very extensive sequence of operations was carried out
safely and successfully - I am very happy with the performance of our
staff and contractors in this regard."
Images from the operations can be found on the company's website at www.falconoilandgas.com or www.falconaustralia.com.au.
About Falcon Oil & Gas Ltd.
Falcon Oil & Gas Ltd. is an international oil and gas exploration and
production company, headquartered in Denver, Colorado, incorporated in
British Columbia, Canada, and trading on the TSX Venture Exchange under
the symbol "FO." The company specializes in the business of
unconventional and conventional oil and gas exploration and production
and holds interests in prospective properties in Australia, Hungary,
and South Africa.
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.
Certain information in this press release may constitute
forward-looking information. This information is based on current
expectations that are subject to significant risks and uncertainties
that 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
SOURCE Falcon Oil
For further information:
please visit our website at www.falconoilandgas.com or contact investor relations at 303-951-1110, or firstname.lastname@example.org.