Ryder Scott Issues Update on Beetaloo Basin
-Shenandoah-1 Well Results Support Estimates-
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<p><location>DENVER</location>, <chron>Oct. 27</chron> /CNW/ -- 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 <chron>October 23, 2009</chron> (the "Letter"), which supports the Ryder Scott Company-Canada Resource Analysis Report, dated <chron>August 5, 2009</chron>, effective date <chron>July 1, 2009</chron> ("Report"), on the Company's Beetaloo Basin Project in the Northern Territory (NT), of <location>Australia</location>.</p>
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<p>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."</p>
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<p>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.</p>
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<p>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 <location>Australia</location> Pty Ltd, the Company owns an undivided 75 percent working interest in the Permits, and is the operator of the Permits.</p>
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Their resource evaluation of the Beetaloo Basin is as follows:
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Table 9: Total Undiscovered and Prospective (Recoverable) Oil
Resources in the Beetaloo Basin, Australia
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Reservoir Unrisked Undiscovered Unrisked Prospective
Oil-In-Place (Recoverable)
(Bstb) Oil Resources (Bstb)
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<p> Low Best High Low Best High</p>
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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
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Table 10: Total Undiscovered and Prospective (Recoverable)
Gas Resources in the Beetaloo Basin, Australia
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Reservoir Unrisked Undiscovered Unrisked Prospective
Gas-In-Place (Recoverable)
(Tscf) Gas Resources (Tscf)
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<p> Low Best High Low Best High</p>
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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
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<p>[Tables 9 and 10 from the <chron>July 1, 2009</chron> 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.]</p>
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<p>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."</p>
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<p>Ryder Scott evaluates oil and gas properties and independently certifies petroleum reserve and resource quantities in the U.S., <location>Canada</location> and internationally. Founded in 1937, Ryder Scott is one of the largest, oldest and most respected reservoir-evaluation consulting firms in the industry.</p>
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About Ryder Scott
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<p>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 <location>Calgary</location> and <location>Denver</location>.</p>
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<p>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 <location>London</location>, <location>Toronto</location>, <location>Hong Kong</location>, Australian, and other stock exchanges.</p>
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<p>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.</p>
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About Falcon Oil & Gas Ltd.
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<p>Falcon Oil & Gas Ltd. is an international oil and gas exploration and production company, headquartered in <location>Denver</location>, Colorado, incorporated in British Columbia, <location>Canada</location>, 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 <location>Hungary</location> and <location>Australia</location>. 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 <a href="http://www.falconoilandgas.com">www.falconoilandgas.com</a>. Investor inquiries may be directed to <a href="mailto:[email protected]">[email protected]</a>.</p>
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<p>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 <a href="http://www.sedar.com">www.sedar.com</a> before making investment decisions with regard to the Company.</p>
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<p>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.</p>
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For further information: Stephen Schultz, Falcon Oil & Gas Ltd., Investor Relations, +1-303-893-1800, [email protected]; or Al Palombo, Cameron Associates, Investor Relations, +1-212-554-5488, [email protected] Web Site: http://www.falconoilandgas.com
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