News: Falcon Oil & Gas receives $20M from Australian farm-out

Falcon Oil & Gas (LON:FOG) has confirmed the completion of its farm-out deal in Australia.

The group’s 98% owned Australian subsidiary has now divested a 70% stake in the Beetaloo basin assets – with local operator Origin Energy (ASX:ORG) and South African gas-to-liquids specialist Sasol acquiring 35% each.

Upfront Falcon receives A$20mln of cash, though more significantly the new partners have committed to funding a nine well work programme.

They will spend A$64mln on the first phase of five wells, while the next phase of horizontal drilling will cost around A$100mln.

The drilling will be designed and targeted to take the project towards commerciality, the company said.

“I am delighted to announce we have completed the agreements with Origin and Sasol for our transformational farm-out of our Beetaloo acreage,” said chief executive Phillip O’Quigley.

“Farm-out of our Beetaloo acreage. Together with A$20 million cash up front, the deal is worth up to approximately A$200 million to Falcon.

“We look forward to the immediate commencement of the nine well exploration and appraisal programme."