Bryan Sheffield recently boosted his strategic stake in Falcon Oil & Gas Ltd. through a private placement from his holding company that Sheffield said provides exposure to potentially one of the world’s largest shale plays.
Falcon and its joint venture partner, a subsidiary of Origin Energy Ltd., have the largest acreage position—about 4.6 million acres—centered over the Beetaloo Sub-basin, which, according to Sheffield, is “emerging as a world class shale gas basin with stacked pay potential from several shale intervals.”
“I am delighted to have this opportunity to acquire a significant interest in Falcon and gain exposure to their net 1 million acres in what may become one of the biggest shale plays in the world,” Sheffield commented in the release by Falcon Oil & Gas on March 31.
As part of a $10 million private placement from Sheffield Holdings, Falcon said it issued 62.5 million of its common shares to Sheffield at a price of CA$0.20 per share. Following the placement, Sheffield will hold roughly a total of 90.4 million common shares of Falcon, representing 8.66% of Falcon’s issued and outstanding shares.
Falcon also agreed, according to the release, to grant Sheffield a 2% overriding royalty interest over Falcon Australia’s interest in the Beetaloo Sub-basin exploration permits in return for a cash payment of US$6 million.
The private placement will supplement Falcon’s cash balance of $8.4 million as of Feb. 28, which the company said leaves Falcon in a strong financial position well ahead of future decisions on the Beetaloo project.
“Falcon is very pleased that Bryan Sheffield of Sheffield Holdings LP has increased his strategic stake in the company at this time,” commented Falcon CEO Philip O’Quigley adding that “Bryan is a highly successful investor and has made significant returns in the U.S. unconventional energy sector in the past,” in reference to the sale of Sheffield-founded Parsley Energy in the Permian Basin to Pioneer Natural Resources for $7.6 billion in 2021.
Incorporated in British Columbia, Canada and headquartered in Dublin, Ireland, Falcon’s principal interests are located in two major underexplored basins in Australia and South Africa.
Falcon holds 22.5% 22.5% working interest in the 4.6 million gross acres in exploration permits covering the most prospective core area of the Beetaloo Sub-basin in Australia’s Northern Territory.
Flow tests from the B Shale of the Amungee Member have confirmed a productive dry gas system in place, according to Sheffield who added in the release that geologic and engineering data from test wells across the sub-basin have “similar properties to some of the highly successful shale gas plays in the United States.”
“The Beetaloo Sub-basin is still in the exploration and appraisal phase, but with continued good well results, Falcon is well positioned to become a key supplier of low carbon energy to Australia and to the world within a few short years,” he said.
The investment in Falcon Oil & Gas follows Sheffield acquisition in November 2021 of a roughly 7.4% stake in Australian natural gas explorer Tamboran Resources Ltd. through a $20 million investment from Sheffield. Tamboran also develops unconventional natural gas resources located in the Beetaloo Sub-basin.
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