As Falcon Oil & Gas (FOG) has been explaining for some time, its stake in the Beetaloo Basin in Australia has a huge amount of potential. That was demonstrated this week in an evaluation report by licence operator Origin Energy, which suggested Falcon's share of technically recoverable resources stands at 25 trillion cubic feet (tcf), or 1.94 tcf of 2C best estimate net contingent resources.
The 43 per cent share price rise that greeted the news runs contrary to the concerns that have dogged Falcon's stock for much of the past year. Last September, the newly elected Northern Territory government issued a moratorium on fracking, casting doubt on the likelihood that the Beetaloo Basin - where Falcon holds a 29.4 per cent interest in several drilling permits - will become a source of gas for Total and Inpex's enormous Darwin LNG plant, some 600km to the north.
Investors will now be hoping that the potential commercial scale of Beetaloo will force authorities into an about-turn, and ease the suspension outside of residential and environmentally protected areas. The Origin report only covers drilling results from the Middle Velkerri B Shale and leaves an enormous amount of resources to be evaluated.
