Falcon Oil & Gas has announced its decision to reduce its working interest in the proposed Shenandoah South Pilot Project (Pilot) from 22.5% to 5%. This move will optimize Falcon’s interest in the Beetaloo sub basin located in Northern Australia, as it will only have to cover 5% of the costs for the two wells to be drilled in 2024 as part of the Pilot.

“Falcon’s decision to reduce its participating interest to 5% in the Pilot is a wise use of our capital resources, as it significantly decreases our cost exposure,” said Philip O’Quigley, CEO of Falcon.

“This decision by Falcon showcases our ability to optimize our interest in the Beetaloo for the benefit of our shareholders,” O’Quigley added.

In 2023, Falcon participated in the SS1-H well at its 22.5% working interest, which resulted in the creation of a Drill Spacing Unit (“DSU”) of 20,480 acres.

The two wells planned for the 2024 drilling program will establish two new DSUs totaling 51,200 acres, in which Falcon will maintain a 5% working interest.

Notably, 51,200 gross acre area has the potential to accommodate 23 well pads (138 wells based on six wells per pad, 3,000-meter lateral sections and 500 meter well spacings) and it is expected to support the wells required to supply gas for the proposed 40 million cubic feet per day (mmcf/d) Pilot Project into the Northern Territory gas market.

Falcon will still retain a 10% working interest in the enlarged area of approximately 72,000 acres surrounding the Pilot, as well as a 22.5% working interest in the remaining 4.52 million acres in the Beetaloo, with a net of one million acres to Falcon.

Following Falcon’s Decision, Tamboran has increased its working interest in the proposed Shenandoah South Pilot Project t to a minimum of 47.5%.

“The increased working interest to a minimum of 47.5% over 51,200 gross acres in the core of the Beetaloo West acreage is a significant opportunity for Tamboran’s shareholders,” said Joel Riddle, Managing Director and CEO of Tamboran Resources Corporation.

Tamboran and Daly Waters Energy, LP (DWE) as 50/50% owners of Tamboran (B2) Pty Limited have agreed to pick up the non-consent, increasing interest to 95%.

Tamboran and DWE will carry Falcon for up to A$3.75 million gross (A$1.875 million net) for the first well post 30 June 2024.

“We plan to announce the Final Investment Decision on the proposed Pilot Project in mid-2024, subject to funding and standard stakeholder and joint venture approvals,” Riddle said.