-Shenandoah-1 Well Results Support Estimates-
DENVER, Oct. 27 /PRNewswire-FirstCall/ -- Falcon Oil & Gas Ltd. (TSXV: FO)
("Falcon" or the "Company"), a global energy company focused on acquiring,
exploring and developing large acreage positions of unconventional and
conventional oil and gas resources, announced that Ryder Scott Company
provided a letter to Falcon, dated October 23, 2009 (the "Letter"), which
supports the Ryder Scott Company-Canada Resource Analysis Report, dated August
5, 2009, effective date July 1, 2009 ("Report"), on the Company's Beetaloo
Basin Project in the Northern Territory (NT), of Australia.
Ryder Scott engaged in a preliminary review of all the newly available data
from the deepening of the Shenandoah-1 well, including the logs and cores.
Based on Ryder Scott's review of these data, the Ryder Scott Letter states,
"This work supports the resource estimates and conclusions presented in the
Report. The preliminary analyses indicate that both the Lower Kyalla and
Middle Velkerrie organic rich shales likely contain significant amounts of
adsorbed gas. In the deepened Shenandoah #1 Well, the mud-log recorded very
high gas readings while drilling through both shale intervals and gas was
observed in the drilling mud. High mud-log gas readings and high resistivities
were also observed from the top of the Moroak Sandstone (1,718 meters) down to
approximately 1,806 meters at which point both the gas readings and log
resistivities dropped. Preliminary log analyses suggest the possibility of a
gas/water contact at that point and the possible existence of a conventional
gas accumulation in the Moroak Sandstone in the well."
The Letter also includes various cautionary notes regarding the uncertainty
and preliminary nature of the findings and data at this stage in the
exploration of the properties.
Falcon's interest in the Beetaloo Basin consists of four Exploration Permits
(the "Permits") comprising approximately 28,200 square kilometers (7 million
gross acres), covering the majority of the Beetaloo Basin and basin margin
highs. Through its wholly owned Australian subsidiary, Falcon Oil & Gas
Australia Pty Ltd, the Company owns an undivided 75 percent working interest
in the Permits, and is the operator of the Permits.
Their resource evaluation of the Beetaloo Basin is as follows:
Table 9: Total Undiscovered and Prospective (Recoverable) Oil
Resources in the Beetaloo Basin, Australia
Reservoir Unrisked Undiscovered Unrisked Prospective
Oil-In-Place (Recoverable)
(Bstb) Oil Resources (Bstb)
Low Best High Low Best High
Hayfield 0.049 0.088 0.148 0.005 0.010 0.018
Jamison 8.220 11.920 16.402 0.800 1.337 2.153
Conventional Subtotal 8.269 12.008 16.550 0.805 1.347 2.171
Upper Kyalla Shale Oil 127.4 180.9 256.0 11.3 17.8 27.4
Shale Oil Subtotal 127.4 180.9 256.0 11.3 17.8 27.4
Total Oil Resource
Within The Beetaloo
Basin 135.67 192.91 272.55 12.11 19.15 29.57
Table 10: Total Undiscovered and Prospective (Recoverable)
Gas Resources in the Beetaloo Basin, Australia
Reservoir Unrisked Undiscovered Unrisked Prospective
Gas-In-Place (Recoverable)
(Tscf) Gas Resources (Tscf)
Low Best High Low Best High
Hayfield (Associated
Solution) 0.013 0.025 0.046 0.002 0.004 0.009
Jamison (Associated
Solution) 2.041 3.330 5.349 0.313 0.585 1.066
Moroak 0.800 1.437 2.346 0.607 1.048 1.731
Conventional Subtotal 2.85 4.79 7.74 0.92 1.64 2.81
Moroak BCGA 21.00 29.61 40.85 3.18 4.85 7.23
Bessie Creek BCGA 159.4 210.0 275.0 23.8 34.4 49.4
BCGA Subtotal 180.39 239.58 315.81 27.02 39.28 56.64
Lower Kyalla Shale Gas 12.70 15.80 19.20 1.90 2.60 3.50
Middle Velkerrie Shale
Gas 94.6 125.1 160.4 14.2 20.4 29.0
Shale Gas Subtotal 107.3 140.9 179.6 16.1 23.0 32.5
Total Gas Resource
Within The Beetaloo
Basin 290.54 385.27 503.16 44.05 63.91 91.94
[Tables 9 and 10 from the July 1, 2009 Ryder Scott Report. For a definition
of "Low" "Best" and "High," see Section 5 of the Report titled "Definitions of
Resources and Reserves," item 5.3.5 titled "Uncertainty Category." The total
oil and gas resource is an arithmetic summation of the multiple estimates of
the individual reservoir resources. Under Section 5.2 of COGEH: Undiscovered
Petroleum Initially-In-Place (equivalent to undiscovered resources) is that
quantity of petroleum that is estimated, on a given date, to be contained in
accumulations yet to be discovered. Prospective Resources are those
quantities of petroleum estimated, as of a given date, to be potentially
recoverable from undiscovered accumulations by application of future
development projects. Prospective resources have both an associated chance of
discovery and a chance of development. There is no certainty that any portion
of the undiscovered resources will be discovered and that, if discovered, it
may not be economically viable or technically feasible to produce any of the
resources.]
The Report on the hydrocarbon resource potential of the Beetaloo Basin
describes a possible distribution of the unrisked prospective (recoverable)
portion of unrisked "Undiscovered in-place Resources," as defined by the
Canadian Oil and Gas Evaluation Handbook (COGEH) and does not represent an
estimate of reserves or contingent resources. The Report has been prepared in
accordance with the Canadian standards set out in the COGEH and is compliant
with National Instrument 51-101 "Standards of Disclosure for Oil and Gas
Activities."
Ryder Scott evaluates oil and gas properties and independently certifies
petroleum reserve and resource quantities in the U.S., Canada and
internationally. Founded in 1937, Ryder Scott is one of the largest, oldest
and most respected reservoir-evaluation consulting firms in the industry.
About Ryder Scott
Ryder Scott evaluates oil and gas properties and independently certifies
petroleum reserves quantities in the U.S. and internationally. The firm
performs several hundred consulting studies per year for a variety of clients.
The firm has earned worldwide recognition for reliably predicting the
performance of complex oil and gas reservoirs in all major petroleum
provinces. With approximately 90 professional petroleum engineers and
geoscientists, the firm conducts reserve and resource evaluations,
geoscience/geology studies, field development and EOR design, reservoir
simulation, economic analysis, management consulting and expert witness
testimony. The Houston-based firm has branch offices in Calgary and Denver.
Ryder Scott, by far, is the most widely used consulting firm for preparing
annual petroleum reserves certifications for filers with the U.S. Securities
and Exchange Commission, according to research firm John S. Herold. Ryder
Scott also serves clients listed on the London, Toronto, Hong Kong,
Australian, and other stock exchanges.
The firm issues reserves certifications considered to be highly reliable by
banks and private investment groups. Major banking institutions establish
reserves-based loan amounts, monitor credit lines and determine guarantees
based on report values. The report also serves as a resource in screening and
due-diligence reviews of acquisitions, divestitures and mergers.
About Falcon Oil & Gas Ltd.
Falcon Oil & Gas Ltd. is an international oil and gas exploration and
production company, headquartered in Denver, Colorado, incorporated in British
Columbia, Canada, and trading on the TSX Venture Exchange under the symbol
"FO." The Company specializes in the business of conventional and
unconventional oil and gas exploration and production and holds interests in
prospective properties in Hungary and Australia. The Company is focused on
discovering, acquiring, and maturing a globally diversified portfolio of
drilling opportunities with a goal of maximizing shareholder value through
strategic relationships. Additional information concerning Falcon Oil & Gas
Ltd. is available at www.falconoilandgas.com. Investor inquiries may be
directed to investor@falconoilandgas.com.
In the interests of providing Company shareholders and potential investors
with information regarding the Company, including the Company's assessment of
its and its subsidiaries' future plans and operations, certain statements
included in this press release may constitute forward-looking information or
forward looking statements (collectively, "forward-looking statements"). All
statements contained herein that are not clearly historical in nature are
forward-looking, and the words "anticipate", "believe", "expect", "estimate"
and similar expressions are generally intended to identify forward-looking
statements. Similarly, forward-looking statements in this press release
include, but are not limited to anticipated developments of the Company's
various drilling projects and the timing thereof, capital investment levels
and the allocation thereof, pipeline capacity, government royalty rates,
reserve and resources estimates, the level of expenditures for compliance with
environmental regulations, site restoration costs including abandonment and
reclamation costs, exploration plans, acquisition and disposition plans
including farmout plans, net cash flows, geographic expansion and plans for
seismic surveys, or successfully engaging a partner in any of the Company's
endeavours. In addition, please note that statements relating to "reserves" or
"resources" are deemed to be forward-looking statements, as they involve the
implied assessment, based on certain estimates and assumptions, that the
reserves and resources described can be profitably produced in the future.
Such statements represent the Company's internal projections, estimates or
beliefs concerning, among other things, an outlook on the estimated amounts
and timing of capital expenditures, anticipated future debt levels and
incentive fees or revenues or other expectations, beliefs, plans, objectives,
assumptions, intentions or statements about future events or performance.
These statements are only predictions. Actual events or results may differ
materially. Although the Company believes that the expectations reflected in
the forward-looking statements are reasonable, it cannot guarantee future
results, levels of activity, performance or achievement since such
expectations are inherently subject to significant business, economic,
competitive, political and social uncertainties and contingencies. Many
factors could cause the Company's actual results to differ materially from
those expressed or implied in any forward-looking statements made by, or on
behalf of, the Company and the foregoing list of important factors is not
exhaustive. These forward-looking statements made as of the date hereof
disclaim any intent or obligation to update publicly any forward-looking
statements, whether as a result of new information, future events or results
or otherwise. Company shareholders and potential investors should carefully
consider the information contained in the Company's filings with Canadian
securities administrators at www.sedar.com before making investment decisions
with regard to the Company.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that
term is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.
SOURCE Falcon Oil & Gas Ltd.
Stephen Schultz, Falcon Oil & Gas Ltd., Investor Relations, +1-303-893-1800,
investor@falconoilandgas.com; or Al Palombo, Cameron Associates, Investor
Relations, +1-212-554-5488, al@cameronassoc.com
