Falcon and Petroceltic in share price spike

Falcon Oil & Gas, an exploration company chaired by industry veteran John Craven, saw its share price surge by close to 8 per cent on Tuesday after it reported positive results from the first well drilled at Beetaloo, an enormous potential gas fracking prospect in Australia.

Falcon has a 30 per cent share in the project, which gives it and its partners, Origin and Sasol, rights to explore an area the size of Wales. Falcon told investors yesterday the first well of a five-well drilling program designed to test the geology of the site "demonstrated moveable gas".

Philip O'Quigley, the chief executive of Falcon, told The Irish Times that the drilling results had exceeded expectations.

Beetaloo is seen within the industry as potentially a major non-conventional gas play, although it could be a couple of years before it is known whether it holds commercially obtainable quantities of gas. Other “horizontal” wells will need to be drilled next year to further appraise the site.

“It is only the first step, but it is the best first step we could have taken,” said Mr O’Quigley. “We now already know that we can drill two horizontal wells next year. But we don’t know the gas saturation, so we still need to be cautious.”

Second well

Mr O’Quigley said the drilling rig was currently being moved to another site within the prospect to begin drilling a second well. Falcon’s bigger partners have committed to paying the entire cost of the five-well programme as part of an AUD$200 million (€124 million) farm-out arrangement between the companies.

Davy stockbrokers, which is Falcon’s nominated advisor, welcomed the drilling results.

Meanwhile, Petroceltic International saw its share price spike by more than 14 per cent yesterday in the wake of weekend news that Italian company Eni has made a major gas discovery in Egypt, adjacent to a block owned by Petroceltic.

Analysts said the Eni discovery is potentially huge, and the region could become an alternative source of gas for the continent of Europe.

Petroceltic has a 50 per cent share in the nearby North Thekah and Port Fouad blocks, which Davy said was “astute licence positioning”.