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Be the first with the news that moves the market- Falcon Oil & Gas Ltd. (TSXV:FO) has furthered its joint operations agreement and farm out obligations with Origin Energy Limited
- The agreements relate to the development of the Beetaloo sub-basin in Australia
- Falcon currently owns a 30 per cent interest in Beetaloo’s exploration permits, of which 7.5 per cent will now be farmed out to Origin in exchange for a further C$130.4 million toward the site’s development
- Operations at the site remain temporarily halted since late March, due to the ongoing COVID-19 pandemic
- Falcon Oil & Gas Ltd (FO) remains steady, with shares trading for $0.12 and a market cap of $117.82
Falcon Oil & Gas Ltd. (TSXV:FO) has furthered its joint operations agreement with Origin Energy Limited regarding the Beetaloo sub-basin in Australia.
Falcon currently owns a 30 per cent interest in Beetaloo’s exploration permits, of which 7.5 per cent will now be farmed out to Origin. In exchange, Origin is increasing the work program by a further C$130.4 million.
Due to prior agreements between the two companies, Origin is now required to commit around $230 million to the project.
This deal will result in a joint venture between the two companies, with Falcon owning a 22.5 per cent interest and Origin own the rest.
Due to regulations surrounding agreements like this, Falcon will need to seek TSXV approval, as well as the approval of Australia’s relevant State Government.
Philip O’Quigley, CEO of Falcon, believes this deal further strengthens the company’s standing.
“This farm down together with Falcon’s unaudited cash reserves of C$16.1 million at 31 March 2020 leaves us well positioned to participate in the future upside potential of the Beetaloo.
“We look forward to updating the market as soon as operations recommence in the Beetaloo,” he said.
Operations at Beetaloo were recently halted temporarily, due to the ongoing COVID-19 pandemic. Before the disruption, the companies were in the midst of drilling the Kyalla Well.
Drilling operations in February successfully reached around 3,800 metres. Further preparatory work was also completed in March, before operations were halted.
As a result, Falcon does not expect to stimulate the well until the second half of the year.
Falcon Oil & Gas Ltd (FO) remains steady, with shares trading for $0.12 at 10:28am EST.
