Falcon Oil & Gas Ltd (LON: FOG) shares gapped up 33.24% after announcing positive drilling results from its Velkerri 76 S2-1 vertical appraisal well in the Beetaloo Sub-Basin of Northern Australia.
The company revealed that it had drilled up to 2,129 metres in collaboration with its joint venture partner Origin Energy B2 Pty Ltd.
The preliminary evaluation confirmed the presence of four prospective intervals known as the A, AB, B and C shales within the Amugee Member (previously known as Middle Velkerri).
The initial assessment also revealed that the Amugee Member extends across the Velkerri Formation into the Eastern flank of the Beetaloo Sub-Basin located about 78 kilometres from the Amungee NW-1H well and 73km from the Beetaloo W-1 wells.
Falcom Oil also suspects that the Amugee Member is located in the wet gas maturity window based on the mud gas data collected during drilling.
Investors cheered the news as evidenced by the massive gap higher, but the stock had retraced a significant portion of its gains at writing.
Falcon is set to further analyse the Velkerri B and AB shales after acquiring 93 metres of the continuous conventional core and collecting extensive wireline logging data.
The company’s immediate next step is to conduct a diagnostic fracture injection test (DFIT) to appraise the Velkerri wet gas play.
Philip O’Quigley, Falcon Oil’s CEO, commented: “The preliminary drilling results at Velkerri 76, together with the revised normalised gas flow rate equivalent to 5 MMscf/d at Amungee NW-1H announced in September 2021, is really exciting news for Falcon shareholders as attention shifts to future activity in the Beetaloo.
Adding:
“Falcon is in a prime position within the Beetaloo Sub-Basin with significant real exposure to the Velkerri shales across a range of maturity windows, as established by the results from the 5 wells drilled in the work programme to date. This further development at Velkerri 76 emphasises the ever-growing significance of the Velkerri play.”
Falcon Oil & Gas share price.
Falcon Oil & Gas shares gapped 33.24% higher to trade at 9.46p, rising from Thursday’s closing price of 7.10p.
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