Falcon Expects SA Shale Licence Soon
Canada-registered but Dublin-based Falcon Oil & Gas said on March 9 that the Petroleum Agency of Africa (PASA) "recently confirmed that it expects to finalise a recommendation to the Minister of Mineral Resources on Falcon’s application for a shale gas exploration licence in South Africa’s Karoo Basin by May 2016." Falcon now expects the minister to issue it a full licence to explore for shale gas in 2016.
Nine years ago Falcon was granted a technical cooperation permit covering 7.5mn acres (30,327 km²) in the southern part of the Karoo Basin. In 2012 it announced a cooperation agreement with US major Chevron that enables both firms to work together for a period of five years in jointly obtaining shale exploration licences in South Africa.
Falcon CEO Philip O’Quigley said he was "optimistic" about securing a shale gas exploration licence in South Africa’s Karoo Basin in 2016.
The South African government said on March 8 that it expected shale gas exploration in the country to get underway in the coming year while separately Royal Dutch Shell too indicated that it was still interested in the possibility of exploring for shale gas in the Karoo.
Falcon added that it "continues to review its operation and future plans in Hungary" and evaluate all options to deliver shareholder value. It retains a 100% interest in the Mako Trough. In 2008 ExxonMobil agreed to partner first Falcon and later also MOL in exploring this tight gas prospect, but both abandoned such plans in 2010. Low European gas prices have stymied further exploration in the Mako Trough to date. Falcon received a $3.7mn cash settlement from Gazprom-controlled NIS of Serbia in December 2015 after the termination of a 2013 oilfield services contract.
In Australia, Falcon said that preparations for its 2016 Beetaloo Basin drilling programme were "at an advanced stage", with sites being finalised for the two new vertical wells, following technical evaluation by partners there Origin Energy, South Africa's Sasol and Falcon. The aim is to penetrate condensate/rich gas-mature sections through to dry gas-mature sections of the Middle Velkerri shale, with drilling expected to start in Q2 2016.