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BorntoBoogie: Agree with much of your post. Falcon and Origin(?) paid a renewal fee for the option extension to purchase that remaining 1% royalty. At the time of the extension their actions meant they wanted to see results of additional Beetaloo drilling prior to purchasing that royalty at an increased premium - sorry but I don't recall the specifics on time/money. Thanks for pointing out to some on this board that Philip inherited a mess. One of the first things Philip was told was that the project would be hard to sell with all the royalty burden it carried. Philip has done a great job of repurchasing that royalty and putting the pieces back together.
Glad you are making it down to the Origin investor meeting. I look forward to hearing back what you learn. Origin and Falcon are very hopeful of the Kyalla but what I don't think you will hear is much on this well. Like some other posters on this board I don't believe the vertical has yet been completed. If in fact the vertical has drilled then I will be disappointed in POQ for his news release promises. Even if an unannounced horizontal has been drilled the well will not have been fracked which must occur prior to any indication of shale production results. Then again, even after fracing, the well must unload the fracing fluid and clean itself up prior to any meaningful flow rates. This well was spudded about October 8th - its was estimated that the drilling would take 30 - 45 days and the fracing another 30 - 45 days then to be followed by an extended flow test of 50+ days (guessing). I agree with BO that it might be late January or even February before the EPT results are known. It is also important that everyone keep their expectations in check, for as Newtofo cautioned the Kyalla has never been fracked so it is still a bit of an unknown.
Santos results could be very telling for our Velkerri B discovery and yes, their Velkerri shale runs much deeper than the Amungee 1NW - 1H well - Falcon's shallower Velkerri formation would prove much more economical with similar flow rates.
Agree with Mr. Boogie on the significance of this week’s Origin investor update. Range of possibilities from “we reached total depth”, to perhaps something more meaningful/strategic from a Falcon standpoint. Either way, this is the first operational result for Falcon in many years.
UBS recently stated that they expect a Beetaloo update this week. The more analysts that write about Origin’s Investor Day, better for us. We need Credit Suisse , UBS, Goldman, JP Morgan (all cover Origin) to start recommending Falcon to their clients. Can you imagine? If they’re bullish Beetaloo, then they absolutely could profile Falcon, which is the purest play that’s active.
I too have met Bruner, when I was representative of an institution that owned shares. Nothing more to add.
I agree with Bigones -- (isn't that a nice change LOL). I am fairly sure that the vertical leg has been completed and don't believe the horizontal has been started as yet either! I think there is a great deal of data that has to be analyzed at the Lower Kyalla cross section to determine the best positioning for the horizontal leg - before the horizontal will be started in earnest. If I remember correctly from one of the press releases or comments earlier -- POQ had mentioned that there would be an announcement when the vertical was completed "AND" the horizontal started -- so that would indicate to me that the horizontal has not been started as yet.
It appears from the press releases by Santos that they won't be getting fully underway with their drilling and fracking until the New Year, but I am not positive that is the case. Santos's drilling next door will be a big bonus for us if there fracking flow rates are as good as Santos's initial comments on that Tannburani well seem to indicate. It will certainly take Santos a bit more time -- as the mid-Velkerri B shale in their permitted area is down at 3600 meters versus 2700 meters for the Amungee B shale or the 1700 meters for the Lower Kyalla.
Something for everyone to keep in mind -- is the Lower Kyalla fracking test will be into a brand new type of rock structure that has not been entirely proven as frackable before. The mid-Velkerri B shale was into a hard quartz like structure that is very similar to rock structuring in parts of North America and that quartz fractures under pressure in the right way to release the trapped gas particles. However, the Lower Kyalla has a higher quantity of a Mica like rock structure with less comparables from successful American wells. Origin's geology team knows that the gas and liquids are in the Lower Kyalla and are fairly confident that both are there in significant quantity from the W1 and Shenandoah well results. What they won't know until the first fracture test is done is whether that Mica type rock structure will fracture in such a way that the gas and liquids are released with commercial implications.
If the Lower Kyalla rock structure won't release the gas and liquids that are trapped there in commercial quantities -- then we will have to rely on the tiny little maount of 496 TCF of gas trapped in the mid-Velkerri quartz rocks that we know already are eminently frackable........................
I believe that TD has been hit, but I'm sure no horizontal has started.
BB
What a brilliant post that is.
thanks
This has been a long haul. In my case over 14 years,. It has included 3 visits to Hungary to see at first hand Bruner's largesse at his office in Budapest, tours round his homes in London and 8,000 mile flights to BC to meet Bruner's family at his country cottage near downtown Vancouver and attend FOG's AGM. However I recall falling out early on with FOG's CFO - three or four of us made him rather nervous at these gatherings...Unfortunately it took us too long to fully realise why.
Fortunately our Russian investor with other institutional friends played a constructive role in the end to remove the cancer in the business.....but the extraction very nearly came too late. And all of it was quite a shock to our Hungarian operations team who had thought they were going to become national heroes.
I think this week is going to tell us one way or another if the wait has been worth it. I have 23.00 GMT Tuesday evening or 10.00 Wednesday morning in Sydney in Oz ringed in my diary. Origin have an investor day on Wednesday and they have had enough time to drill a vertical well of 1750 metres and another up to 1500 metres horizontally and do a 'frac. Clearly Philip is hopeful - you only to have to read last month's corporate presentation and UBS in Oz, Cenkos and the Northern Territories Government' have caught the bug in recent months.
If Wednesday goes well, further drilling will add to the excitement next year but the focus will soon switch to FOG's exit options in 2021, and the way the market is developing the Origin team foresee that Philip might be spoilt for choice. ...In the meantime we need the dice to roll our way. What a pity the last few years was spoilt by the regional government moratorium.
Good posts WetWater.
What we need is confirmation of gas in large quantities from a thick seam and if that result comes through it doesn't matter if Santos strike the same in their concession because our operating costs will always be cheaper because their location is deeper below the surface.
I don't underestimate what Philip had to contend with when taking on this challenge. He had an unholy mess to clear up and a lot of silly deals have had to be unscrambled. One or two things still remain - an option on a 1% royalty and a share overhang that has been plaguing the share price the past 24 months.
Everything depends on tomorrow evening.
I agree with you S.A. won't see any development, and it is ashame, I believe this is the best property, and will flow without stimulation. In OZ we should hear that total depth was hit this week ! Next week should be revealed if horizonal will happen. Very important news coming very soon .
Northern: Typically Falcon will give a short update in the corporate presentation at the AGM. IMO there will not be much/any progress in SA. We all thought the last elections would improve the investment environment when in fact things went from bad to worse. With the current corruption and instability of the SA government companies are not going to get in bed with these people. The Karoo is a great asset and the country could benefit from its development but personally I don’t see anything happening short to mid term. All just my opinion.
on the Beetaloo - and rightly so. Does anyone know what the situation is re the Karoo basin - cannot see what Falcon's plans are for this very big area with large potential TCF - nothing seems to be updated on their Projects website for this.
Does anyone know what the plans and current situation is for this project? Do they usually provide an update re the Karoo in the Management Information?
Atb,
Northern