The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
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I didn't say the valuation was in that range. I said the component of valuation due to the cash flow would be in that range. The idea here is to have a reasonable concept of valuation.
Unless there is some other motive.
Smallfish -- if you are talking about Falcon's valuation in the $54-90 million range -- that seems a little low, but if you are talking about Tamboran's valuation (that may not BS's support anymore in 2025) -- then your valuation is very accurate!!
You can reply whenever you feel like trashing Falcon, but my apologies as your posts are filtered out from now on -- so I won't see what you post any longer. Good luck with Riddle in the future -- BYE!!!
Still zero word on EMP and starting of new wells ? We are firmly in second quarter with no news of any kind on this front ?
If a range of 6-10X free cash flow to market cap is utilized that places that component of the valuation in a range of $54-90 million.
I have no qualms with POQ. It’s not him that’s holding back the share price it’s the perceived risks. You can overlay FOG & TBN share prices and they track reasonably well (particularly over the past year). After all it’s the same underlying - the Amungee Basin. The arbitragers will, if they haven’t already, see this (I’m sure BS already has a spreadsheet :-) )
The risks I have on the list:
- EMP needs to be approved (with no significant / costly conditions)
- Tamboran needs a successful IPO (if over subscribed would bode well for us, if unsuccessful we are stymied!)
- The two 2024 wells need to be drilled with absolute precision (no time for mistakes)
- Clarity and security over our long term ability to gain EMP approvals for the rest of Amungee Basin
- Clarity of gas distribution plans / additional pipeline build costs
Any others? If we can tick each one off the share price will rise!
In terms of our 5% of the Pilot Production 40 MMcf/d from 2026. That still amounts to ~ USD 9m pa revenue to FOG - not to be sniffed at!
Looks like WW has an answer for every 180 POQ throws at us. I for one have no idea what to believe going forward. This stock, on a good day, trades less than 0.2% of the total shares available. Lack of interest and or trust of management is the culprit here, not stock manipulation.
If anyone else was in his position they would be screaming from the tops of the mountains to get a fair SP. He clearly is the culprit and in my estimation a cohort with BS.
Oilcountry: I have those same feelings! Someone is holding the stock price down - BS is the logical culprit IMO.
A sale better be in the cards after the next 2 wells as the costs to move forward beyond exploration are significant and we are simply not in a position financially to participate. The plan was always to prove the asset and sell. My hope is we are close and a deal is likely already in the works and is pending the results of the next 2 full length horizontals. I’m perplexed by the disconnect in market capitalization between Empire, Tambo and Falcon. While the former are trading at close to 1 year highs, we are near the low. I can’t help but feel BS has the ability to keep pressure on our stock price to allow for accumulating at a lower cost. The volume is low and easy to keep a lid on us.
"Some have a hard time accepting Falcon's 'backseat' position. "
It would be much easier to accept the loss of the driver`s seat, when POQ would do a great job of promoting FOG and driving the share price to a higher level instead of gifting FOG share parcels like cheap confetti to his new friends (or his new puppet masters?) from Texas on the expense of us long term share holders.
Camelot1: To my knowledge POQ has not switched gears in regard to participation in the horizontals - Falcon still maintains a 5% WI on the SS2H and SS3H wells. There has yet to be an announcement by Falcon in its sole-risk election on the additional pilot program wells to be drilled. I suspect with the lack of capacity (40 pj/d) in the ADA pipeline, there will be only one (SS4H) well drilled in 2026 with the SS5H and SS6H wells drilled in later 2027 or possibly 2028 depending on the progress in the planned new pipeline and the decline curve of the previous wells. IMO, APA is not going to commit to build a 3+ billion pipeline without the pilot wells proving initial production and reasonable decline curves to make that type of investment feasible.
The BJV, of which Falcon is a partner, still has infrastructure and development cost outside of the wells themselves - as I understand it Falcon is still on the hook for 22.5% of this cost? I would assume that would mean participating in the Gas Transportation Agreement cost of laying a 10"(?) line from the pilot program wells to the Amadeus pipeline. There will gas processing facilities amongst other miscellaneous expenses. I haven't seen those details laid out, but Falcon's participation will require funding which POQ has now raised.
I suspect we can all expect to see POQ continue to be a silent partner to Sheffield and Tamboran - that's pretty much the job description of a non-operating JV partner - Some have a hard time accepting Falcon's 'backseat' position. GL
POQ has made a U turn here over the past few months which raises eye brows. 1) There was zero promotion really by the brokers upon the release of the "stellar results" for the well
2) POQ chose initially not to participate in the horizontals and was applauded for it which I do question
3) Indicated that they had enough money for now
4) then magically switched gears and did a financing to participate in the horizontals
5) And now has become almost a silent partner to Sheffield on one of the most prolific gas areas in the world.
What is going on with this guy. I t would seem to me he should have the world by the tail. Yet he is not seizing what looks like a golden opportunity. Or in Anne's way of speaking kicking a gift horse in the mouth and we are all suffering for it. The best results to date and the worst share price. Some thing is very wrong in Dublin.
I would say that this is either a failure on the day the company grinds to nothing, or a success on the day of a good sale. Until that point is reached We are really just still on the journey.
Any given drill result is never the end of the story here and also only a single jigsaw piece of driving share price.
If you don't already know it, opinions are like aholes: every person has one. These boards are comprised of both company supporters and detractors. Do any posters have any facts? Most comments are emotional, and typically more negative, the longer the holding period and the more underwater of the investment. The closer some feel to management, regardless of reason, the more defensive they are likely to be. Historically with Falcon, success will always occur sometime in the foreseeable future. Unfortunately success has never happened, nor have any of the positives resulted in permanent share price improvement. The Sheffieldfamily's successes, knowledge, experiences, investment & industry contacts have yet to improve our lot, nor are our interests their priority. We can either remain investors or seek other opportunities, but don't complain about comments with which you disagree.
Anyone attending, in person, the Falcon Oil & Gas Australia Limited 2024 Annual General Meeting in Darwin on Thursday, May 30th and/or the Falcon Oil & Gas Ltd 2024 Annual General and Special Shareholder meeting in Dublin on Tuesday, June 18th? For the June 18th meeting, looks like Falcon will once again conduct a Q&A via the Investor Meet Company platform later that day.
Ok, let's back off Trillions of TCF..haha, honest mistake.
138 wells at 25 BCF EUR per for 3.45 TCF flowing over 20 years @ 5% = 172 BCF net to FO. Let's say those wells push an average of 12.5 mmcf/d stabilized due to the rate of drilling, pipeline access. Oops, that's 1.725 BCF/day. It's a high estimate, but it makes the point.
So no need to drill past that block for 6+ years or so. Perhaps there's some activity outside the bkock with Sheffield and Tamboran dividing and conquering on checker board blocks post '24 and racing to fill a '27 or '28 1 bcf/d line yet to be FID'd.
The industry generally uses a 10% discounted cash flow to handle the delayed value of money. How much discount do you apply I'd the lion's share of income is well in excess of 5 years out? Most want their return in 5 years, not wait five years.
There's a conceptual gap here, you can't value every molecule of gas, the only molecules that have value are those that can be produced within a reasonable investment timeframe. LNG and pipe capacity present practical limits.
Second problem, valuing Falcon at $500M AUD is 60% over Tamboran's current valuation. What is Tamboran's valuation at the point of Falcon being worth $500M?
How does this compare to EEG?
Newt, I can't say I'm happy to hear that you are now saying basically what I have been saying. I've been looking for alternative theories for what may happen other than- "there is no reason to buy FOG anytime soon other than a lowball offer from BS or his friends". I think $500M is optimistic given he can keep accumulating stock cheap though. I think our best bet is he tries to take us out cheaply and someone else (or more) decides it's worth a bidding war. And if he can keep picking up chunks at $.06 and get his friends to buy out at $.30 or $.35, he may cover his interest in the beetaloo while he waits for that $2-3B offer down the line. The rich get richer.
Margaritaman: Ouch!! You really hurt my feelings - :^) You really need to focus on the bigger picture than POQ or myself! Lots of things coming up for the Beetaloo beginning late in the third quarter of this year. The dynamics of this concession are about to change. Soon you will have other things to concern yourself with than simply ragging on people. Stay Tuned.
Love - WW
Oleo -- posted "Did we ever hear that sleepy POQ set up a relation ship, started to talk with these companies for selling FOG".
I am fairly positive that POQ and the CEO for Inpex have met in Darwin during past oil and gas conferences, and that Inpex has been following the entire Beetaloo gas story with great interest -- especially given Inpex's desire to build a third LNG train in Darwin before 2030.
Before Inpex can even start to build that third LNG train -- they will need a secure and reliable source of at least 5 TCF of gas to keep that third LNG train in operation for 20 years. Inpex could also benefit from Beetaloo gas, once the pipeline for large quantities of Beetaloo gas are flowing to the Darwin LNG plants, as the low 4% CO2 gas from the Beetaloo can be mixed with their very high 18% CO2 gas from Browse basin -- to help reduce their CO2 footprint on gas going into Japan.
One of the major hurdles with Inpex, and other large LNG importers into the Japanese and Korean markets -- (like JETA, and Japan LNG) is they are run by civil servants and are somewhat risk averse. These type of Sovereign Wealth Fund managers will generally be happier to pay a much higher price for access to large quantities of Beetaloo gas -- once the big new pipeline (that will be required to move trillions of TCF of gas to the Darwin area) is almost complete. These civil servants are very unlikely to spend a half billion dollars for Falcon in the next year or two (with no guarantees on when that pipeline will be completed) -- as the lengthy environmental and gov't approvals have not even reached a starting point yet. These mandarins at Inpex, and others, would rather buy out Falcon's interest for twice that amount once the pipeline is fully underway and they have a guaranteed access to Falcon's Beetaloo gas in 2028 or beyond??
For those reasons -- I am looking to hear, (after the next two 3km horizontals), that either corporate associates of Brian's, or wealthy family trusts in Texas -- (that have seen the DATA room), are looking more at Falcon's future potential 20 TCF of gas from the Beetalooo. Maybe we could see one of these family trusts, or someone like EQT, pony up $500 million US next spring -- for the very real potential to wait five or six years for that $500 million investment to be worth upwards of $2 to $3 billion??
Big energy companies look to make tax, investment and income plans decades in advance and so there will naturally be those interested in falcons share of a long term development project.
June 18th can’t come quick enough. Can’t wait to hear the rational for how he has brought us value and what he is doing about it. Makes you wonder if any news will make this stock move other than a sale. And what’s the hurry to buy us since we gave up so much and this block will take several years. Don’t understand the private 6p raised. Don’t understand giving up so gas on this block. Trying to….feels like there is no plan here. Just shooting int he dark, working a few weeks a year, and collecting a big check.
Looks like that is what market was waiting for at least for the Empire and Tambo. Good Volume last night with some good looking gains. I am little surprised that falcon is unchanged.
Oleo, how dare you speak poorly of POQ! Cue the long winded retort from WW, or as I like to call him Mr Verbosity.
From a Santos presentation about the DARWIN LNG (DLNG)
https://hotcopper.com.au/threads/ann-2024-macquarie-investor-conference.7993608/#post-73738284
Project snapshot
Total Capacity 3.7 Mtpa
Reserve &
resource size1
Total Northern Australia 2P Reserves 2,045 PJ
Total Northern Australia 2C contingent reserves 4,679 PJ
Operatorship Santos
Ownership (Barossa) = offshore gas field
Santos 50%, SK E&S 37.5%, JERA 12,5%
Ownership (DLNG)
Santos 43,4% , Inpex 11,4%, ENI 11%, JERA 6%, Tokyo Gas 3,1 , SK 25%
Customers Diamond Gas International2 (Mitsubishi) - 1.5Mtpa, 10 years
Expansion
potential
Petrel-Tern
Browse Basin (Crown, Lasseter, Poseidon)
Betaloo and McArthur Basins
Third party gas
All of these facility owners of Darwin LNG (see ownership list) could be potential buyers of FOG. Did we ever hear that sleepy POQ set up a relation ship, started to talk with these companies for selling FOG? Does this guy even know that he has to create an environment with more than one competitor if he wants to sell FOG. Or does he follow his secret plan not to sell FOG? LOL
Gas as a pillar of Australia’s future
9 May 2024
excerpt -
Beetaloo Basin: A Game-Changer in Australia's Energy Landscape
Amidst this strategic pivot towards gas, the Beetaloo Basin emerges as a focal point of Australia's energy ambitions. Located in the central-northern part of the Northern Territory, this geological marvel is touted to possess globally significant shale gas reserves with transformative potential for Australia's energy market.
The Beetaloo Sub-basin covers approximately 28,000 square kilometres and is estimated to harbour a staggering 500 trillion cubic feet of gas, primarily in the Velkerri B layer. Such reserves have the capacity to revolutionise domestic supply security, drive advanced manufacturing, and facilitate cleaner energy production.
Notably, this abundance of gas resources far exceeds current domestic consumption levels, underlining its potential to reshape Australia's energy landscape significantly.
Presently, three key players within the ASX are actively engaged in developing the Beetaloo Basin. Empire Energy (ASX:EEG), Tamboran Resources (ASX:TBN), and Santos (ASX:STO) are spearheading efforts to tap into this immense resource potential.
As these companies continue their exploration and development endeavours in the Beetaloo Basin, the region's significance as a cornerstone of Australia's energy future only grows, promising economic growth, energy security, and environmental sustainability on a monumental scale.
https://www.sharecafe.com.au/2024/05/09/gas-as-a-pillar-of-australias-future/