On 12 October 2016 Falcon announced that Origin Energy Resources Limited (“Origin”), our Joint Venture partner, had submitted a notification of discovery and an initial report on discovery (“Notification of Discovery”) to the Department of Primary Industry and Resources of the Northern Territory, Australia (“DPIR”) on the Amungee NW-1H well in the Beetaloo Basin, Australia.

Subsequently, in 15 February 2017 Origin submitted the Results of Evaluation of the Discovery and Preliminary Estimate of Petroleum in Place for the Amungee NW-1H Velkerri B Shale Gas Pool (“Report”) to the Northern Territory Government and had also prepared a contingent gas resource estimate.

The submission followed the completion of extended production testing at the Amungee NW-1H exploration well of the “B Shale” member of the Middle Velkerri Formation.

Results of extended production test at Amungee NW-1H

Key Details of the Discovery Evaluation Report

The Report was submitted in compliance with Section 64 of the Northern Territory Petroleum Act (2016) and as per the Reporting a Petroleum Discovery Guideline. The Report follows the initial submission of the notification of discovery and an initial report on discovery in October 2016. The Report provides the following volumetric estimates and recovery / utilisation factor for the B Shale member of the Middle Velkerri Formation within permits EP76, EP98, and EP117.

Middle Velkerri B Shale Volumetric Estimates (1)

 Gross
Best Estimate
Net Attributable
Best Estimate (2)
Area km2 (3)16,1453,564
OGIP (TCF) (4)496109
Combined Recovery / Utilisation Factor (5)16%16%
Technically Recoverable Resource (TCF)8519
OGIP Concentration (BCF/km2) (6)3131

1 The Report and estimates included in the table above were not prepared in accordance with the Canadian Oil and Gas Evaluation Handbook (“COGEH”)

2 Falcon’s working interest is 22.07% (revised as of 7 April 2020 following the farm down, previously 29.43%), net attributable numbers do not incorporate royalties over the permits

3 Area defined by a depth range at a maturity cut-off consistent with the dry gas window within the Beetaloo JV Permits (EP76, EP98, EP117)

4 Trillion cubic feet

5 The combined recovery/utilization factor range was applied stochastically to the OGIP range to calculate the range of technically recoverable resource within the Beetaloo JV permits.

6 Billion cubic feet per square kilometre

Understanding the factors controlling deliverability and recovery as well as spatial variation within the gas play/shale pool are in their infancy. A quantitative assessment of the aggregated estimated recoverable resource of the gas play that can handle these complexities will require a statistically significant number of wells testing the gas play. As there is only a single production test within the gas play Origin decided upon a qualitative assessment approach instead to estimate the technically recoverable resource.

Factors considered in the qualitative assessment of technically recoverable hydrocarbon resource in the gas play were the SRV recovery factor range, the subsurface utilization factor range and surface utilization factor range.

Contingent Gas Resource Estimates for the Middle Velkerri B Shale Pool within EP76, EP98 and EP117

Origin also prepared a contingent gas resource estimate using probabilistic methods and reservoir evaluation data, in addition to regional seismic data.

Assessment of 2C Contingent Gas Resource Estimates for the Middle Velkerri B Shale Pool within EP76, EP98 and EP117 as of 15 February, 20171

Measured and Estimated ParametersUnitsBest Estimate
Area (2)km21,968
Original Gas In Place (OGIP) (3)TCF61.0
Gross Contingent Resource (4)TCF6.6
Net Contingent Resource (4)(5)TCF1.46

1 Contingent resource estimates were prepared on a statistical aggregation basis and in accordance with the Society of Petroleum Engineers Petroleum Resources Management System (“SPE-PRMS”). SPE-PRMS was developed by an international group of reserves evaluation experts and endorsed by the World Petroleum Council, the American Association of Petroleum Geologists, the Society of Petroleum Evaluation Engineers, and the Society of Exploration Geophysicists. Contingent resource estimates are those quantities of gas (produced gas minus carbon dioxide and inert gasses) that are potentially recoverable from known accumulations but which are not yet considered commercially recoverable due to the need for additional delineation drilling, further validation of deliverability and original gas in place, and confirmation of prices and development costs. If the estimates were to be prepared in accordance with COGEH, Falcon is highly confident that there would be no change to the contingent resource estimates above.

2 P50 area from the Contingent Resource area distribution

3 OGIP presented is the product of the P50 Area by the P50 OGIP per km2

4 Estimated gas contingent resource category of 2C. There is no certainty that it will be commercially viable to produce any portion of the resources

5 Net to Falcon’s 22.07% (revised as of 7 April 2020 following the farm down, previously 29.43%) working interest in EP76, EP98, and EP117, the net contingent resource number does not incorporate royalties over the permits

For the full press release on the material gas resource please refer to -> Beetaloo_material_gas_resource.pdf