LONDON (ShareCast) - (Sharecast News) - Falcon Oil reported a record-breaking initial production result from its Shenandoah S2-2H ST1 well in Australia's Beetaloo Sub-basin on Monday, leading to a surge in its shares.
The AIM-traded firm said the well achieved an average 30-day initial production (IP30) flow rate of 7.2 million cubic feet per day over a 1,671-metre lateral within the Amungee Member B-Shale.

When normalised over a 10,000-foot horizontal section, the flow rate reached 13.2 million cubic feet per day - comparable to average rates in the prolific Marcellus Shale in the United States.

The result was the highest IP30 recorded in the Beetaloo to date.

Falcon said the well continued to produce at a steady rate, with an exit flow rate of 6.7 million cubic feet per day and a wellhead pressure of around 910 psi, following a low-decline production profile consistent with Falcon's earlier SS-1H well.

Development activity at Shenandoah South was set to resume in July, with up to three additional horizontal wells to be drilled and stimulated from the SS2 pad.

Falcon said it had elected not to participate financially in the drilling of these wells.

Once complete, the pad's five wells were expected to feed into a 40 million cubic feet per day take-or-pay gas sales agreement with the Northern Territory Government via the Sturt Plateau Compression Facility, with production targeted for mid-2026.

Further completions, including flow testing of the SS-4H well, were expected by the end of the year, with additional wells due in the first half of 2026.

"The IP30 flow rate results announced today of 7.2 million cubic feet per day, are truly stellar and marks another major data point in the Beetaloo Sub-basin again demonstrating that it compares to the best shale wells in the United States," said chief executive officer Philip O'Quigley.

"Not only did the results exceed Falcon's pre-drill commercial threshold of a normalised flow rate of three million cubic feet per day per 1,000 metres but had similar flow rates and pressures to SS-1H and SS-2H ST1, which all point towards the significant resource potential of the Beetaloo.

"Falcon looks forward to the planned completion and testing of SS-4H by the end of 2025 and also to observing the results from the next three wells of the Shenandoah South drilling programme and the additional milestones they will establish."

At 1203 BST, shares in Falcon Oil & Gas were up 25.7% at 8.3p.

Reporting by Josh White for Sharecast.com.

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