Falcon Oil & Gas, Ltd. reported 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 Pty. Ltd., 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.

Testing Results

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 standards.

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, 2011.

Tags: Falcon Oil & Gas