Falcon Oil & Gas Ltd. spuds the Kalala S-1 well in the Beetaloo Basin, Australia. Kalala S-1 is the first of Falcon's fully funded and uncapped, 2015 three well drilling and evaluation programme in the Beetaloo Basin. The 2015 three well programme is the commencement of a nine well exploration and appraisal programme planned from 2015 to 2018.

Highlights: •Kalala S-1 is the first well of the initial 2015 three well fully funded drilling programme, targeting the Middle Velkerri formation to assess hydrocarbon saturation and reservoir quality. •Kalala S-1 is located within exploration permit 98, with access from the existing Carpentaria Highway, and will be drilled to a total depth of approximately 2,800 meters. •Rig 185, an ATS 400 has been commissioned from Saxon Energy Services Australia Pty. Ltd, a Schlumberger company. •It is estimated that drilling will take approximately 35 to 50 days. •Kalala S-1 is to be operated by Origin Resources Limited (35%) with partners Sasol Petroleum Australia Limited (35%) and Falcon (30%).

Falcon is fully carried for all 2015 drilling and evaluation costs, retaining its 30% interest in 4.6 million gross acres of the Beetaloo Basin with co-venture partners Origin and Sasol.

The principal objectives of the 2015 three well drilling programme are to: •penetrate the Middle Velkerri formation to assess hydrocarbon saturation and reservoir quality; •evaluate oil versus gas maturity and determine the most prospective areas and depth window; •provide further information on the aerial distribution of the target Middle Velkerri formation; and •collect data points for subsequent vertical/horizontal drilling, completion and production testing. •Formation evaluation and reservoir characterisation will be carried out from these initial three wells through petrophysical interpretation, core analysis, geomechanical studies and stimulation design.

Philip O'Quigley, CEO of Falcon commented,'The spudding of Kalala S-1 well is an important milestone for the Company and marks the start of our initial three well fully funded 2015 drilling campaign. The initial drilling programme is designed to test the hydrocarbon saturation and reservoir quality of the basin and determine the prospectivity of this highly attractive basin. We will update the market as soon as results become available.'

Tags: Falcon Oil & Gas