Falcon Oil & Gas advances Beetaloo Sub-basin stimulation program

Falcon Oil & Gas Ltd. has provided a key operational update on its ongoing stimulation program in the Beetaloo Sub-basin, Northern Territory, Australia. The company, in collaboration with its joint venture partner Tamboran (B2) Pty Limited, has made significant progress on two critical wells—Shenandoah South 2-2H ST1 (“SS-2H ST1”) and Shenandoah South 4H (“SS-4H”). As the company nears the crucial production testing phase, investors and industry analysts are watching closely to assess the potential of this emerging gas resource.

What Are the Latest Developments at the SS-2H ST1 Well?

The SS-2H ST1 well has completed its stimulation program, marking an important milestone in Falcon Oil & Gas’s Beetaloo Sub-basin campaign. The well underwent stimulation operations across 35 stages in the 1,671-metre (5,483-feet) horizontal section of the Amungee Member B-shale formation. The company worked with Liberty Energy, a leading U.S.-based service provider, to execute the stimulation process, achieving strong efficiency levels with five stages completed over a 24-hour period on multiple occasions.

The SS-2H ST1 well is now being prepared for initial flow back and extended production testing, which will provide critical data on reservoir performance. Falcon Oil & Gas has set a target to release 30-day initial production (IP30) flow rate results in April 2025. These results will offer insight into the well’s gas production potential and could play a crucial role in determining the commercial feasibility of full-scale development in the Beetaloo Sub-basin.

What Challenges Have Affected the SS-4H Well?

Operations at the SS-4H well commenced in January 2025 but were temporarily paused due to structural concerns. During completion operations, the operator identified stress in a casing connection, prompting a precautionary suspension of stimulation activities. Falcon Oil & Gas has confirmed that reinforcement work is scheduled to take place in Q1 2025, with stimulation operations expected to resume in Q2 2025 after the IP30 flow test of the SS-2H ST1 well is completed.

Despite the delay, Falcon Oil & Gas sees this as an opportunity to incorporate lessons from the SS-2H ST1 stimulation program, which could lead to improved operational efficiencies and flow test results. The company now expects to announce IP30 flow rates for SS-4H in mid-2025.

How Is Falcon Oil & Gas Positioned Financially?

Falcon Oil & Gas has strengthened its financial position through a recent research and development tax offset, receiving A$4.7 million (~US$3 million) in cash. As of its latest update, the company’s cash balance stands at US$8.2 million, providing the necessary capital to support its stimulation program and upcoming production testing.

CEO Philip O’Quigley emphasized the company’s confidence in the stimulation process, highlighting strong gas shows observed during drilling and the successful completion of SS-2H ST1’s stimulation. He reiterated that Falcon Oil & Gas remains optimistic about the flow test results and their potential to confirm the viability of commercial gas production in the Beetaloo Sub-basin.

What Is the Structure of the Beetaloo Joint Venture?

Falcon Oil & Gas operates in the Beetaloo Sub-basin under a joint venture agreement with Tamboran (B2) Pty Limited. Under this structure, Falcon Oil & Gas Australia Limited holds a 22.5% stake in the Beetaloo Joint Venture (covering exploration permits EP 76, 98, and 117), while Tamboran (B2) Pty Limited holds a 77.5% interest.

Additionally, in the Shenandoah South Pilot Project, which spans 46,080 acres, Falcon Oil & Gas Australia Limited holds a 5% stake, with Tamboran (B2) Pty Limited controlling the remaining 95%. This partnership is expected to be pivotal as the project moves closer to the commercial phase.

What Are the Next Steps for Falcon Oil & Gas?

With the SS-2H ST1 flow test set for April 2025 and stimulation activities for SS-4H resuming shortly after, Falcon Oil & Gas is approaching a decisive period in its Beetaloo Sub-basin development. The company’s ability to deliver strong IP30 flow results will play a crucial role in advancing towards full-scale gas production.

Industry experts are closely monitoring the performance of Falcon Oil & Gas’s stimulation program, as the Beetaloo Sub-basin is regarded as one of Australia’s most promising unconventional gas resources. If flow test results confirm sustainable high gas production rates, it could accelerate the region’s role in bolstering Australia’s domestic energy supply and positioning the country as a key player in global gas markets.

The coming months will be critical in determining whether Falcon Oil & Gas can translate its stimulation success into commercial gas production, setting the stage for future development and investment in the Beetaloo Sub-basin.