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TSX Lithium explorer International Lithium Corp prepares to drill at Raleigh Lake
Exclusive: Hardman & Co Investor Forum - Severn Trent, Calculus Capital, Volta Finance, Residential


Falcon Oil Share Chat (FOG)



Share Price: 13.65Bid: 13.50Ask: 13.80Change: 0.00 (0.00%)No Movement on Falcon Oil
Spread: 0.30Spread as %: 2.22%Open: 13.65High: 13.65Low: 13.65Yesterday’s Close: 13.65


Share Discussion for Falcon Oil




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WetWater
Posts: 589
Opinion:No Opinion
Price:14.125
RE: UBS Report
23 May '19
Nerves: I’m not too concerned with the 3mmcfd figure. If the Amungee well didn’t meet the requirements of success we would not be reading the UBS report. If you allow for six hundred meters of frac and convert the Amungee’s flow figure to 1000 meters you come up with 2 mmcfd. As Nano mentioned and the UBS report states the production string was undersized - likely due to cost reduction for the test well. I don’t know what flow restrictions that would create but as Nano pointed out there would be a reduction. Anyway, I’m not concerned about that figure - everyone seems pretty pleased with the discovery.
 
schlemiel
Posts: 2,203
Opinion:No Opinion
Price:14.125
RE: UBS Report
23 May '19
I do like the reference to 800 TJ/D which equates to around 131k boepd. 30% of that should command a decent take out price with the caveat of proving up etc
nervesofsteel
Posts: 192
Opinion:No Opinion
Price:14.125
RE: UBS Report
23 May '19
Well, the report is clearly written in excellent English so it's unlikely that any errors could be in phrasing or grammar.

That being said, the statement:

"In our view, achieving gas flows >3mmscf/d from a single 1,000m horizontal well confirms our valuation."

is only open to one interpretation linguistically speaking, i.e. UBS is stating that 3mmscf/d gas flows from a single 1,000m horizontal well WERE ALREADY ACHIEVED. Not could be, might be or would be if extrapolated into a 3,000m well. Who knows if that's what they meant but from a pure language point of view, it's not what they said.

In addition, the fact it was in the "Evidence" section makes it obvious that they meant it as a fact, not a supposition.

But because we know that 3mmscf/d gas flows from a 1,000 well WERE NOT ACHIEVED, it pretty much renders the "confirms our valuation" worthless.

As ever with Falcon, nothing makes sense and everything is totally confusing!
newtofo
Posts: 828
Opinion:No Opinion
Price:14.125
RE: UBS Report
23 May '19
Thanks Nanodarcy. This seems like a stretch -- yet the on page 3 of the UBS report it clearly states under the "Evidence" section where they refer to gas flows to back up their increase valuation on Origin:

"In our view, achieving gas flows >3mmscf/d from a single 1,000m
horizontal well confirms our valuation."

This statement seems to indicate that they are referring to the Amungee H1 well, but I am not sure where they get this higher flow rate from -- unless they have extrapolated from their statement on page 6 where they indicate that the proper well casing would have returned higher flows? Page 6 states: " Further, we understand that gas flows during the production test were constrained by inadequately sized well casing which limited the gas flow that could be achieved".

Fortunately - UBS is including Santos in this future valuation if the flow rates, using the correct well casing, from their property next door, or from an Origin well on Falcon's side meet this higher flow rate on just one well. On page 9 they state:
"We consider that it will only take one well from either the Origin or Santos-
operated (ASX: STO) acreage to achieve our gas flow threshold (as success can be
replicated across the basin) to 'prove concept' and confirm our expectation that a
large scale development is commercially viable".

Nanodarcy, given your background and work experience -- how likely is a flow rate of 3mmcfd per 1000 m if either Santos or Origin gets the correct well casing with an expert crew from either Slumberger or Halliburton?
Nanodarcy
Posts: 49
Opinion:No Opinion
Price:14.125
RE: UBS Report
23 May '19
Newtofo, it doesn’t look like it’s a typo as the typewell has an IP of 10+mmscfd for a 3000m lateral implying an IP>3mmcfd per 1000 m
newtofo
Posts: 828
Opinion:No Opinion
Price:14.125
RE: UBS Report
23 May '19
Wet, I am fairly sure this was an error in stating a length of 1000 meters -- as UBS is fully aware of exactly how big the flow was from the very short 1000 meter Amungee H1 well, which they know was a success. Therefore, they will be looking at tripling that number to 3mmcfd by tripling the length of the horizontal to compare with current run lengths in the Marcellus and other US shale plays. There is no chance whatsoever that UBS was looking for the Amungee type well to be three times better flow when you look at all the comparable charts that UBS used in this report when comparing the Velkerri shale to the Marcellus shale and others in the US
WetWater
Posts: 589
Opinion:No Opinion
Price:14.125
RE: UBS Report
22 May '19
A 3mmcfd flow from a 1000 meter lateral sounds high to me. Maybe out a 3000 meter lateral? If what they stated is correct then the Amungee well didn’t come close to commerciality and I know Origin was very excited over that well - it exceeds their expectations. I’m thinking a typo? Though that would be a glaring mistake. .
dprussky
Posts: 925
Opinion:No Opinion
Price:14.125
RE: UBS Report
22 May '19
It was 1000 meter well with 600 meter frac.
ITguy
Posts: 317
Opinion:No Opinion
Price:14.125
RE: UBS Report
22 May '19
Correct

The Amungee NW-1H horizontal well was completed with 11 hydraulic stimulation stages in the 1,000 m long horizontal section within the Middle Velkerri B shale zone. The production well test took 57 days. Early stage gas flow rates through 4 1/2” production casing regularly reached over 1-1.5 MMscf/d. Extended flow test rates through 2 3/8? production tubing ranged between 0.8-1.2 MMscf/d. Test results in the Amungee NW-1H well proved up the discovery of gas accumulation in the Middle Velkerri B shale.
RichGreenwood
Posts: 6
Opinion:No Opinion
Price:14.125
RE: UBS Report
22 May '19
If I recall correctly, Origin did not do a very big frack. I think they had to stop after 11 stages. If they use a modern frack design, I suspect it will be 2 or 3 times as many stages and a lot more proppant.
schlemiel
Posts: 2,203
Opinion:No Opinion
Price:14.125
RE: UBS Report
22 May '19
cheers mate
OrsonModesto
Posts: 296
Opinion:No Opinion
Price:14.125
RE: UBS Report
22 May '19
Around 500 boepd
schlemiel
Posts: 2,203
Opinion:No Opinion
Price:14.125
RE: UBS Report
22 May '19
Anyone

How much is 3 mmscfd converted to boepd?
Marshmill
Posts: 942
Opinion:No Opinion
Price:14.125
RE: UBS Report
22 May '19
What does success look like?

"We believe the threshold to achieve commerciality are flows >3mmscf/d from a 1,000m horizontal well."

"We consider that it will only take one well from either the Origin or Santos- operated (ASX: STO) acreage to achieve our gas flow threshold (as success can be replicated across the basin) to 'prove concept' and confirm our expectation that a large scale development is commercially viable."

"Further value could be realised if Origin can confirm a natural gas liquids (NGLs) and/or condensate play can be commercialised and achieve a condensate-to-gas ratio (CGR) >3%. The presence and/or commerciality of any NGLs (C3 and C4) or condensate (C5+) will be better understood following Stage 2 drilling from Jun 2019."
Marshmill
Posts: 942
Opinion:No Opinion
Price:14.125
RE: UBS Report
22 May '19
Hear, hear.
"Origin's Beetaloo asset in remote Northern Territory is poorly understood by the market in our view.", says UBS.
Sounds like POQ has a job to do.
Marshmill
Posts: 942
Opinion:No Opinion
Price:14.125
RE: UBS Report
22 May '19
Thanks, Vegas!
schlemiel
Posts: 2,203
Opinion:No Opinion
Price:14.125
RE: UBS Report
22 May '19
Hurrah!!!!!!!

thanks so much VG and of course newt
VegasGal
Posts: 49
Opinion:No Opinion
Price:14.125
UBS Report
22 May '19




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