Investors swoop on Falcon after positive results
Shares in Falcon Oil & Gas rose by over 5pc yesterday to £20.50 on the London Stock Exchange after the company said it was in a 'strong' financial position, debt free, and with cash of US$8.5m (€7.1m) at 31 March.
In a three month trading update yesterday, the Dublin-headquartered company reported a loss of $655,000 (€548,000) for the three-month period, a substantial reduction on the loss of $2.9m (€2.4m) reported for the same period in 2017, as it continues to focus on cost management and the efficient operation of its portfolio.
The company, which has projects in Australia, South Africa and Hungary, had total assets of $50.1m at 31 March 2018, down slightly on the total assets of $51.2m at 31 March 2017.
General and administrative expenses were $504,000 during the three-month period.
Last month the company said that it expects serious drilling activity to begin in 12 months' time at its major prospect in Australia, where a government ban on fracking has been lifted, enabling the project to proceed. The Northern Territory prospect had been put into abeyance after the moratorium was established. The ban was lifted in early April, but Falcon boss Philip O'Quigley said last month that a new permitting process put in place will take three to six months to complete.
In addition, monsoon-like weather will also delay the process, pushing a planned five-well programme back into 2019.
The programme will be carried out in conjunction with Falcon's partner in the project, Australian business Origin.
Well tests carried out prior to the moratorium indicated what Falcon called "a very promising material gas resource". The firm is now free to seek to exploit the gas on a commercial basis.
Australia is home to the world's sixth-biggest reserves of shale oil and seventh-largest of shale gas, and the vast, remote Northern Territory remains in the early stages of exploration.
The area "could have enough gas to serve Australia for almost 200 years", the nation's Resources Minister Matt Canavan said. (Additional reporting Bloomberg)