LONDON: Falcon Oil & Gas Ltd. (TSXV: FO, AIM: FOG) has announced the signing of a significant Binding Agreement under the Beetaloo Joint Venture (BJV). The agreement outlines a long-term Gas Sales Agreement (GSA) with the Northern Territory Government to supply an annual volume of 14.6 petajoules (13.8 billion cubic feet) of gas from the anticipated Shenandoah South Pilot Project.

The initial term of the agreement spans nine years, with the government holding an option to extend for an additional six-and-a-half years. The gas will be supplied to the APA-owned Amadeus Gas Pipeline (AGP) on a take-or-pay basis, with pricing set to be competitive in the market and subject to escalation in line with 100% of the Consumer Price Index (CPI). Should the government exercise its extension option, it will benefit from a slightly reduced price.

This binding supply commitment is contingent upon several key milestones, including the BJV’s entry into a binding Gas Transportation Agreement with APA for the proposed Sturt Plateau Pipeline, a binding Gas Processing Agreement for the Sturt Plateau Compression Facility, a Final Investment Decision (FID) on upstream drilling activities, and the procurement of all necessary approvals to advance these projects.

The BJV has set its sights on achieving FID for a proposed upstream drilling program capable of producing 40 terajoules (38,000 thousand cubic feet per day) by mid-2024, pending the acquisition of funding and essential regulatory and stakeholder approvals. The first gas flow from this ambitious project is projected for the first half of 2026.

Falcon Oil & Gas Australia Limited, a subsidiary within the venture, holds a 5% working interest in the expansive 51,200-acre area designated for the wels required to fulfill the volumes projected for the Pilot Project. This strategic move positions Falcon Oil & Gas Ltd. as a key player in the region’s energy future.

Philip O’Quigley, CEO of Falcon commented: “This is a significant development for Beetaloo Joint Venture, and represents a major milestone and puts the Beetaloo Joint Venture on a path where revenue from gas sales will support funding our future development phases, including supply to the East Coast and LNG gas markets.”

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