Sativa Wellness Group #SWEL, the UK-based CBD business give London South East an operational update Watch Now
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You are correct in your assessment as things stand today. POQ is not going to jeopardize his nest egg to purchase these shares. However, on the surface so to speak the reality is, if the discovery is as good as it appears and if FOG had $50 million on the balance sheet instead of ~$10 million, purchasing these shares would be 1 of 2 things: a) brilliant, if additional drilling proves up what we are hoping for, or b) if the drilling proves no good; it will not be much of a difference. POODS
Longknife. Some thoughts to consider when looking at Origin's plans for the Beetaloo and what Origin would hope to see for a return on their 77.5% ownership of the Beetaloo. If the gas is there in the quantities that Origin and Falcon believe they are -- then the "long term" value of the Beetaloo is definitely more than $5 Billion.
However, even though there is most likely many TCF of gas that can be recovered, it will take a decades long commitment and many $billions to drill thousands of shale wells to produce that gas.
Shale gas well productions are closer to mining than they are to conventional gas fields, mainly due to the huge number of wells that have to be drilled and fracked to bring those many TCF, (that are spread out over almost a thousand square kilometers), to the surface.
If Origin is to eventually see a huge profit from the Beetaloo -- they will be on site for a couple of decades investing huge sums into all the massive infrastructure of wells, gathering and pumping systems, roads, pads, pipelines, personnel, and more to make that kind of profit.
Anyone, (like Inpex or Santos), that buys out Falcon's 22.5% interest -- will also be committed to not only a decades long investment, but will also be on the hook for 22.5% of all the $billions in outlays that will be required before any of the profits start rolling in.
Therefore, anyone buying Falcon for a $billion US in the very early stages of development -- will most definitely be looking for something closer to a $3 billion return on that investment over the next couple of decades.
It’s hard to believe that this whole beetaloo strike would only be worth under $5B and this the roughly $1 for FOG. If that’s what we get, this would be a good investment but not a great one.
Origin789. It would be nice if there was enough free capitol to make that happen, but I think POODS is right in that it would really take someone like Viktor to handle an extra $5 million at this point. Falcon has the capital currently, but if you take out the $6 million that will be required in the Fall of 2022 to cover Falcon's share of reducing the overriding royalty down to 1% -- then there is no way that Falcon can buy out the remaining 47 million Petrohunter shares.
If Falcon purchased those shares with a view to selling them at a discount to existing shareholders -- that most likely would not work. We have a great number of long term shareholders, but many like myself are already fully committed to Falcon and even when we were at a few cents lower a few months ago -- very few (except POODS) could afford to commit more. We are in the dubious position of owning one of the most underrated stocks in the natural gas world, but with so many errors in the past, so many delays, so many government misdirection's, and so many shares outstanding -- there are few that want to play in our sandbox anymore.
Even if we get excellent news out the Lower Kyalla -- we may only see a short lived recovery due to Falcon's history, Petrohunters daily killing of momentum, and all the day traders playing games with our huge float. However, this has always been about who buys us out and that part I have no doubt POQ will handle expertly, (but most likely for something closer to $1 US due to our lower percentage ownership and the loss of any real control).
A better way to do this is what used to be called a "spot secondary" of the shares. The shares would be bought be the brokerage firm at X and reoffered to interested parties at X + a fee per share. Do not know what that is called in Canada. Doing it that way eliminates a lot of regulatory bs and can be done in a matters of minutes with proper notice. Probably showing my age by discussing an old technique that may not exist by that exact name!! POODS
Falcon should buy the block of shares, and give the share holders the option of purchasing a number at the discounted price. The time and the price is right, and we could easily absorb the shares between all shareholder's.
With regards the available shares, the best buyer would be for the Russians to add to their position, if in fact they have not lost interest. Origin, may be precluded from doing so, but also may have considered this. In the end my guess is the shares will continue to trade poorly until there is reason for the shares to move based or either good or bad news. If someone figures out how to put this block together and has time to contact me, I would have additional interest. POODS
As Poods mentioned, since the last equity raise will NOT be used for the said intended purpose, Falcon should purchase these Petro Hunter shares using these funds. This will not happen because it will shorten the golfing gravy train that POQ has been on, so in the meantime we watch the share price just slide away! Credibility = O
The order from the judge stated that the petrohunter shares could not be sold at more than a 10% discount to the current price. I think that is probably part of the issue with selling these off in a block trade.
I thought about this and here is an idea. But it will only make sense if the purchase of the shares is done with significant discount. Basic idea is create the investment group which can purchase all of the shares and this will help spread the risk and maybe put individual on the falcon board.
If Origin had been the initial source of our recent news release, perhaps FOG would not essentially fallen on its face. If Origin had announced the news, the market response may have been more positive and thus absorbed more of the sellers shares. Speaking of that, so far just for anyone curious, not one response of additional interest from this board. Totally okay, but thought some might like to know. Still working on the project, as buying the entire block personally is doable but at my age not so smart. POODS
Orson, that is one way to look at it.
Nice to see more activity moving forward. Sure wish Santos would get going on their completion/operation.
In relation to your comment about the depressed share price due to the liquidation, I view this as a rare opportunity to possibly be able to derisk one's investment by being able to wait until after positive data is released and still be able to buy in before an upward move in the share price, no? How long of a timeframe that may be, I have no idea.
The receiver will simply sell into any strength generated from the release of potentially positive news. Surely the receiver would be better advised to find a block buyer off-market to take FOG stock off his hands otherwise the distressed selling extends well into the future. It's a weight around the price's neck that will never be removed...disheartening
It would be nice if the flaring lit up Daly Waters.
There is a "chance" that we might get some preliminary flow results in hopefully four weeks time -- if POQ follows the same press release timing as he did with the Amungee H1 well -- four LONG years ago!!! There was both visible flaring and a very cautious announcement, (around two weeks after the water and frack fluids had completely cleared) -- that indicated successful "initial" flow rates.
Since Falcon is no longer in any kind of control position -- this may not be the case with Origin, but I believe POQ will want to get out good news as soon as possible and the flaring may help persuade Origin to do the same.
If Origin were not a massive public utility and simply an oil company they would have IP rates a week after they start fracing. They might (small chance) want to publish IP rates prior to their AGM on Oct 20.
They’ve stated they would release IP rates before the end of the year.
Any idea if we would hear about initial flow rates and when that could happen?
Nice to hear that Haliburton is now on site and the fracture testing finally moving forward. I am very confident that we will see both dry and liquid gases flow back from this 1.5 km long horizontal -- after Haliburton completes up to 15 stages on the frack.
However, the bigger question will be whether we see something close enough to commercial returns. Something like one million cu. ft. per day of dry gas with hopefully 40 plus barrels per day of wet gases coming back to surface -- once all the water and frack fluids have been cleaned out of the well bore. The lower Kyalla offers more risk to commercial flow rates than the mid-Velkerri B and C shale zones -- mostly due to the differences in the compressed rock structure. The mid-Velkerri is primarily a hardened quartz zone that fractures both vertically and horizontally quite nicely -- which is very effective for releasing the methane molecules that are sitting on quartz surfaces.
The lower Kyalla has a number of different types of what is closer to a mica type of rock structure. The question for the fracking crew will be how best to force this different kind of rock structure so that both lateral and horizontal fractures go out in all directions far enough to release large quantities of both the wet and dry gas that Origin knows categorically are in situ.