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Well the grant price is between 8 and 15 so they are only valuable above those prices and they you have to pay CGT on anything above that price. When they lapse if you haven't exercised they are gone. So they are worthless below the exercise price and they are worthless after the lapse date so if I was a beating man which I am because I'm invested in Falcon I'd say it would be safe to assume they don't want to lose the 20m at 8p that lapse in 2026 so I'd say you'll see a sale before then
I see what you mean. I assume when these options are exercised we will get an RNS(RNSs) , so gives a bit of a time scale as to how they might want to maximise the extracted value having made their options purchases.
Atb,
Northern
If you want the best indicator of the minimum price we will sell for and an indicative timeline. Check out note 9 on page 12 on the last set of published financial statements on their website.
https://falconoilandgas.com/download/falcon-financial-statements-30-september-2023/
I don't know many boards who would let 60m of share options lapse before extracting the value.
I think personally that your figure is cheap. If you go back in time and look at POQ's valuations charts this is way too cheap for wells that are flow as good as the best in the states. I think much higher....this guy will to quote him " extract the maximum out of a buyer" ...keep in mind his options....just my opinion...Camelot
I assume it will be difficult to find a buyer who is willing to pay the 10 fold share price. But I also think that overtaking FOG for 1 US$, 1 british Pound is too cheap. And thats the reason I think it is POQs job to show more activities for increasing FOGs share price. Otherwise I see the risk that somebody could overtake FOG with a too low share price.
Your right bloobird, I think i had a senior moment there.
Origin768
I don't think it works like that. Each individual acre is only 22% owned by FOG ... they can't just chop bits off and sell to a third party. If that WAS the case then FOG could just pick the best blocks to sell.
Yes, I agree. The more things gear up towards production, the more expensive our 22.5% becomes, which is why the opt out was a smart move for Falcon, with the cards we hold, and we avoid diluting, or reducing our percentage.
I hope this won't be the case, but could POQ consider selling part of our acreage or sell individual blocks of 72,000 acres?
If so, the price per acre would be hefty, Aus is possibly the place most big companies would choose to be in the world at this moment!
Northern, while a $1.50 US price range is not totally out of the upper range on a sale, it is worth keeping in mind that there is no cash flow and no infrastructure in place -- all of which will be very expensive for any buyer of Falcon's 22.5% interest.
Any buyer of Falcon's 22.5% interest will have to have a very large cash reserve in order to cover their share of what will be very expensive wells in the first couple of years, plus their share of an expensive gas processing plant, gathering pipelines to the processing plant etc. etc. -- all long before any cash flow starts to offset some of the forward costs.
Camelot -- you may want to hope that POQ hasn't been reading all your posts -- as he might sell for 5 cents -- just to see "how you like them apples" -- LOL.
On a separate note -- Tamboran's share price took a small hit today in Aussieland, but still holding up better than Falcon (but then again everything holds up better than Falcon -- sheesh). Tamboran could be down as those investors start taking into account the fact that the rest of the Pilot Production wells will cost Tamboran a great deal more now -- since Falcon's move to let Tamboran and BS shoulder 95% of the costs going forward.
Tamboran shares could also be down a bit as those Aussie investors start to take into account the reality that Riddle is going to be diluting Tamboran by a massive amount when the listing in the US finally gets completed. Even Falcon needs to see that listing in the US happen for Tamboran fairly soon -- in order for Tamboran to match the over $100 million in US funds that BS has raised to cover his share of the Pilot Program.
Thanks for your opinion Camelot1 very much appreciated. I agree with you. It's difficult to see how it would jump from the current figure to a much higher one. I think given the resource another company would be buying into indeed £1 would be very cheap. I just wanted to try to gauge other people's opinion. One thing that gives me great hope is that quite a number of companies in the area are now talking about development that is heading towards commercial production and I am sure that is going to make a difference.
Atb,
Northern
I think personally that your figure is cheap. If you go back in time and look at POQ's valuations charts this is way too cheap for wells that are flow as good as the best in the states. I think much higher....this guy will to quote him " extract the maximum out of a buyer" ...keep in mind his options....just my opinion...Camelot
Possible exit price/sale of Falcon's share. Do people think £1 would be a possibility?
Atb,
Northern
In reviewing the poorly researched article on Empire's 3mm acres -- (that only has a limited amount of their permits in the actual shale part of the Beetaloo) -- I started thinking more about how and why EQT could possibly be the first in line for Falcon's 22% and maybe already in discussions with both POQ and Brian Sheffield???
I have long thought that Inpex would be our most interested buyer of Falcon's 22% of the Beetaloo gas -- as that share of the Beetaloo gas would give Inpex the confidence level to move forward on the 3rd LNG train they want to build next to the existing two LNG trains in Darwin (why do the call them trains -- as they don't look like any that I have ridden -- LOL). The other reason Inpex could be very close to the top of Falcon's potential buyers -- is that Inpex has indicated that they have little interest in being an E&P driller in the Beetaloo, but rather just needs that 5 TCF of potential gas at a very good discounted price point to help offset the 3rd LNG train expenses. Inpex could obviously just buy the gas from Tamboran or even Empire or Santos down the line, but that 5 TCF of gas would cost Inpex a great deal more than just buying out Falcon's 22% interest and getting that 22% of the Beetaloo gas at the net cost of production and transport -- which could be one-third the price of buying in the open market in 5 years time??
However, I am now thinking that EQT could very well be moving into position as Brian Sheffield's partner in the Beetaloo -- due to a number of very nice coincidences. Who owns one million acres in Marcellus and who owns one million acres in the Beetaloo?? Who is very well acquainted with and most likely good friends with Brian Sheffield (and most likely has access to all the drilling data) versus who is Brian Sheffield already a JV partner with in the Beetaloo?? Who is now reaching the point of limited drilling locations in the Marcellus versus who has 1000's of drilling locations in the Beetaloo?? Who has a $16 billion market cap and needs to find new Marcellus quality new shale gas basins versus who happens to own three valid permits across 4.5 million acres in the Beetaloo that compares highly with the Marcellus for shale gas?? The answer to all these questions is pretty easy for those that STILL own Falcon shares -- LOL.
EQT could take out Falcon's 22% interest in the Beetaloo with breaking a tiny sweat folks. EQT could do a very minor 5% share offering (using their stock that is currently worth $16 billion) taking out Falcon's 22% for around $800 million. This minor stock dilution for EQT might cause a minor drop in their stock price on the American exchanges, but that might be very short lived when EQT investors realize that EQT has just snapped one million acres again in the next Marcellus without having to pay a penny in cash. This scenario would also allow Falcon owners to stay invested in the Beetaloo or sell out??
Smallfish: Hate to see you go but everyone has their own opinion - I respect that. As to Falcon's 'vanishingly small filament of interest' - I'm pleased that Falcon has retained not only their average 10% in the upcoming areas of development but also 22.5% of an additional 4.5 million acres. Falcon has never tried to be a production company - its goal has always been to sell its interest of this concession. As such, Falcon has managed to not only survive the last 15+ years by converting its 100% interest in the Beetaloo into a company with has no debt and has been carried for close to $300 million of drilling which has helped defined much of the aerial extent of this shale basin’s 4.6 million aces. I am in agreement with the opinion of the Australian government, the NT, Sheffield, Tamboran's and Falcon's opinion that the Beeetaloo is a world class asset that can provide Australia with many years of much needed gas resources. Yes, Falcon has been on a long tenuous journey, but it has survived to this point, closing in on its objective of selling its Beetaloo asset. Falcon no longer holds 100% of the Beetaloo but, realistically, if it did, where would the Beetaloo be today? I'm of the opinion that Falcon's ‘small filament of interest’ will offer we shareholders a nice return - good luck to you in the future - I have always appreciated your input and opinions.
No. Not always, just sometimes. And being a LTH, I feel the end of our journey is quite close. The geology favours us and any time an offer related to the resources will arrive. And probably preceded by a SP rise based on rumours or leaks.
Interesting article ITguy -- but not very well researched by the Sydney Morning Herald, as they must not have any reporters that know shale gas or know the Beetaloo Basin.
This clip talks about Empire having 3mm acres in the Beetaloo, but if sand and dirt is what you want then 3mm is accurate, but 90% of that 3mm acres is totally outside of any shale gas indications. That is the reason that Empires four wells to date are all inside that remaining 10%.
"The leader of that pack is probably ASX-listed Empire Energy, the largest landholder in the basin by far, with an extraordinary 3 million net effective acres of ground under its control".
This next bit from the article is hilarious -- as it describes EQT's Marcellus one million acre holdings in the Marcellus as tiny when compared to Empires Beetaloo holdings. EQT's Marcellus shale gas wells flow three or four times better than Empire's shale gas wells, and all of EQT's acreage is in the core of the Marcellus versus Empire's shallow 10% of the Beetaloo.
"A fun fact is that Empire’s landholdings in the Beetaloo are roughly similar in size to core areas within the Marcellus shale. Notably, not even the leading producer of gas in the Marcellus shale, the US$16b EQT Corporation, comes close to the scale of Empire’s holdings with its 1m net acres".
EQT's one million acres is more comparable to Falcon/Tambo's dark blue Core area of the Beetaloo -- which the current SSH1 flow rates, depths, pressures, gas saturation etc etc are all confirming. All of that being said -- Alex Underwoods promotional efforts have been excellent given the less than stellar flow rates from Empires two horizontals.
This last bit from the article is so ridiculous and so beyond reality -- that the Sydney Morning Herald should be sued for misleading readers and potential investors in Empire!!
"And the rub? Well, Empire’s preliminary financial modelling shows a project net present value for phase 2 coming in at A$2.5b and phase three is showing an NPV of wait for it……A$14.5b".
Wet,
I meant did he think the 90 day rates would affect the current price- I understand that everything that happens will affect the eventual sale price. As far as 8-9 years, yes I was being a bit facetious. My point however, (and I understand this doesn't mean anything to anyone but me) is on this as an investment. I'm not convinced we will get $.30 much less $.60 (and again,not based on any valuations of the potential resources but more about who is interested and who can exert influence on the price) but even at $1 this might not have been a good investment. A double or even a triple when you've held 15-20 years is not great when you bought in at $.20 or $.30 or more. I'm also not even a little convinced that we will sell within 24 months. So as far as I'm concerned, although we've seen some encouraging news, this is still a questionable investment even when it sells.
Rsacas, why do you insist in embarrassing yourself! The payday has always been just around the corner.
I repeat:
POQ can’t control geology.
POQ DOES control investor marketing, interviews in financial media, participation in conferences, general public relations. In this regard, our CEO failed us.
Apaprently according to your summary of Falcons history you have chosen one of the worst moments to leave.
Or you want to drive the SP down intentionally.
Good luck.
I've tried to put a sock in it, but I'll keep it as brief as I can.
Falcon is well known for the Mako asset, it went nowhere. South Africa is to say the least is uninviting, but it has gone nowhere.
The Beetaloo showed potential, and still demonstrates profound potential, but was challenging. It was farmed to Hess who exhibited nothing but conventional exploration interests, they spent a lot of money looking in the wrong direction, the product was nothing. Zero. Falcon then demanded that Origin 'delineate' and explore across incredible scale on Kyalla and Velkerri targets. Objectively the result was nothing.
I began looking at this basin 14 years ago and the target was as obvious then as it is now. Yes, multiple crisis have plagued the play, but I'm lost on how Falcon has advanced the case. Truly lost.
There's a great tale of a virtual genius who traded a paper clip for a house through a number of transactions.
https://en.m.wikipedia.org/wiki/One_red_paperclip
You know where I'm going with this, Falcon has steadily and consistently traded shareholder value from the potential value as the planet's most valuable single shale position (see Sheffield engagement) into a vanishingly small filament of interest.
The recent pre-mature election (PME in short) to further farm down Falcon's interest for the foreseeable future which includes the likely potential build to 1 bcf/d is, for me, is the final chapter in Falcon holding the premise of investment.
Circus provides great entertainment, indeed there is a balance between performer, viewer and the promoter.
The only one here who benefits is the latter. Sold, done, out.
LongKnife: The IP90 flow rate does in fact have a lot to do with pricing when this asset sells as it gives an early indication of the decline curve and what these next two wells will produce. I don't know where you come up with 8-9 years to sell much less .60 at the end of that extended term; hopefully we are just seeing the sarcastic side of you :^) Falcon has stated its goal to sell by the end of 2025 - POQ has given us a hopeful 18-24 months' time frame. I would look for some offers being made after these next two wells are flow tested - we may not be privy to some of those early offers but with the Beetaloo heating up they should be forthcoming.
From my 'green bars' appearing and the responses of some, I would guess Camelot must be posting some of his typical POQ bashing remarks - that's about all that guy offers which is what earned him a filter block on my account. Camelot seems stuck in that mode with nothing better to offer - why he even sticks around is beside me. Is he bigones reincarnated? Naw - bigones has a better understanding of the industry. This guy has nothing to contribute yet feels the need to be heard, just a downside of a public board.
Down to nitpicking semantics? You are a real asset to the board.
It definitely sounds like you have the inside track here. Especially when you say " the price he negotiated" and not what he may negotiate. Are you telling us that POQ already has a deal done and you have knowledge of same?
James- and do you think that will do anything for the share price? Falcon, are you ok then if POQ negotiates a buyout at say$.60 /share in 8-9 years? Would that have been a good investment for you? What would you consider a success?