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RobRoy -- great article and the most encouraging part comes from the Chief Minister and the Resources Minister for the Northern Territory. There comments below bode very well for the EMP getting passed fairly soon, (and fortunately the anti-frack bunch missed the deadline of December 31st to submit any written dissensions to the full Pilot EMP). Maybe the politicians will buy a few Falcon shares and get this darn stock moving up instead of down -- sheesh.
"Northern Territory Chief Minister, Eva Lawler, said, “The Northern Territory is on the cusp of immense economic growth, and will be at the forefront of the nation’s transition to a net zero future".
“Today’s results released by Tamboran, who are also proponents of the Middle Arm Sustainable Development Precinct, paints a prosperous picture for the Territory as we strive towards a $40 billion economy by ensuring we capitalise on our world class energy resources".
“It is critical we continue to enable growth in this sector, because with growth comes a predicted 13,000 more opportunities for Territorians to work in new sectors, more reliable energy sources, lower emission production and lower power bills,” Ms Lawler said.
Northern Territory Minister for Mining, Mark Monaghan, said, “The Beetaloo Basin has globally significant Natural Gas reserves which will transform clean energy production in Australia".
“Sitting 500km south east of Darwin, are projects which will create multibillion dollar growth to our economy, and Tamboran’s 30-day flow test results is a key step in delivering on this vision".
“We will be the jurisdiction to deliver cheaper, more reliable and lower emissions gas to the rest of Australia for decades to come,” Mr Monaghan said.
That included the possible valuations of acreage along a value curve for different stages of progress towards production.
I believe the relevant figures quoted were
Trends $40 / acre, Undeveloped $844 / acre, Appraisal $4,009 / acre, Production $18,489 / acre.
So, just as a very approximate finger in the air.
Say we are at the undeveloped stage at the moment and if we give this a relevant value of 1
i.e. say Undeveloped $844/acre = 1
then Appraisal $4,009/acre = $4009/$844 = 4.75
and Production $18,489 / acre = $18,489/$844 = 21.91
and we use these multipliers with the current share price 10.10p
Then we might have for the second 2 stages i.e. Appraisal and Production an sp of
Appraisal 4.75 x 0.1010 = 0.47975 or 48p rounded
Production 21.91 x0.1010 = 2.21291 or 221.29p
However there is the theory and the practice - time literally will tell on this one but is interesting just to have a play with the numbers.
A further point that is probably bearing in mind is how far into the Appraisal and Production phases it was when these former results were achieved. Which is probably very relevant in term of how/when Falcon make a decision as to when they might wish to sell.
Atb,
Northern
Https://www.energymagazine.com.au/beetaloo-basin-natural-gas-pilot-project-complete/
Does anyone know the estimated cost to drill and frack the next two 3000 meter wells scheduled for 2nd quarter 2024? For some reason I was thinking I heard a number of $15M US per well? If Falcon has $5M cash and another $2.5M carry, that comes very close to covering Falcon's 22.5% responsibility based on a $30M total.
LK, someone wanted a big chunk. I remember reading about a hedge fund trader that would have a specialist work an order within a specific price range for months. So if something looks stuck or held down there’s a good chance someone really is holding down, to accumulate a big order. Once you realize that by selling a few hundred thousand could net you a couple million at your price it makes sense. Perfect time too, with day traders thinking this would double off good news. Specialist knocks it down, day traders sell, people on fence not only don’t buy, but ones on fence about selling throw in the towel and sell. Then add in stock loss orders and you got yourself a nice chunk at a cheap, de-risked price. The article also said the last 5-10% of the order would be a sweep of the street, so when he says I filled your order at an average of .13 and look at it now, trading at .16, the specialist looks like a genius. Nope, this is all playing out perfect. Definitely a good time to add. Of course, I’ve been in since the Bruner days, but have never been more excited. The Bruner curse is finally disappearing. And, with a number of averaging down buys and a sell here and there on pops I am in the green, so that helps buoy my spirits. Patience, our time is coming.
T
Wet,
I watched that as well and I'm guessing he bought those shares over the last few weeks hoping for a quick pop to $.20 or above and when he didn't get it he sold. I'm surprised he was able to sell that many so fast without an even bigger drop.
RR1, my guess is big accumulation going on. As I’ve mentioned before the way to get stock is taking it down not up. I just noticed volume on folgf went over 1,000,000 today. While wondering who sold and why is legitimate question, I’m more interested in who took it in and how much more he wants. Another guess is that before we see a buyout we will see a nice period of volume which will be the tip-off. If your a big major going to buy out falcon at a buck, wouldn’t it be prudent to get as much down here as possible? It would give you a leg up should some other suitor come along. That same scenario happened with a gold stock I own. They had a good position in another mine but eventually got outbid by Chinese company. Bottom line, they made some nice money on the position they had in the mine. I have every confidence we will be higher a month from now with someone out there starting to get a foothold on the company. It should become apparent in how much it takes to move us versus now. Fun times ahead.
T
I was looking at some date on the early Marcellus entrants and re-reviewing the Hart's article I provided a link for. Range Resources was in othe rareas, but the Marcellus really accelerated its valude. Range had about a USD$3.5 billion market cap in 2005 when it drilled the first commercail Marcellus well in 2005. It broguht the first well online in 2007 and by August 1, 2009 had drilled 50 vertical and 50 HZ wells. Range had 900,000 acres, but about 550,000 in thearea it was devleoping. In April 2008, Range had a market cap of about USD$14 billion and gas prices had hit USD$12/MMbtu. As we all know, the economy tanked late 2008 and gas prices plunged. Range's market cap dropped to around USD$7 billion in 2009. In 2010, Range's market cap hit USD$14 billion again, which I would say is largely due to the Marcellus. The point is, it took a lot of development for the new shal play to pay off, but if you can filter out movements due to overall economy and yo-yo'ing natural gas prices, the Marcellus created billions of dollars of value largely due to a 550,000 acre position in the right part of the play. GLA
Robroy: There also was a disappointing open on the US market this morning. Someone dumped a million shares of FOLGF, driving it down from US $.13 to US $.11.9 in about 35 minutes. The stock is now trying to work its way up a bit but what was that guy thinking?
RobRoy -- extremely disappointing and looking like it will get worse unless POQ and Joe Nally start promoting Falcon to some new buyers and big investment houses very soon??
The existing long term owners aren't buying any more shares no matter how cheap they are getting -- as we all know from the Investor Meets session -- that no sale is likely to happen for at least another year and most likely longer. Anyone looking at buying Falcon (you too Marshmill) is going to sit on the sidelines waiting for the bottom again -- as we now know that not even STELLAR flow rates will move this stock higher.
The only way this stock is moving higher will be with a new group of sophisticated brokerages/investment banks coming in for a seriously nice return on their investment. If there is not a concerted effort to promote Falcon to the big investment banks (that should be thrilled with a 500% return in 18 to 24 months) fairly soon -- then the share price will keep drifting lower. Any fund raise done at these levels would be severely dilutive as well -- which also indicates that the dog and pony shows should be in the works -- (hopefully soon LOL).
Part of the problem for people like me and other larger investors is there is almost a dearth of shares on offer on AIM In fact if one was only trying to buy three quarters of a million shares it would push up the stock 30-40 per cent and one would struggle to fill the order..
The shares are very, very cheap right now, in reality the cheapest they have ever been since Bruner first came to London in early Summer 2006 to talk to a few of us at a private lunch arranged by Carina Corbett at the Claridge's Hotel in London. Everyone should realise that after the recent NR the Falcon play has been significantly de-risked. Personally I have now pencilled in a minimum take out price of 50 pence on AIM {USD0.60-0.65 depending on currency movement}, end 2024 early 2025, and if all goes well in the next 6 months or so none of us need rule out 75 US cents or more particularly if POQ can get more than one party wanting a slice of the Beetaloo prize at the end of this year.
Nevertheless I still say what would be the icing on the cake in the next few months {or before the end of the year}, were if Bryan Sheffield were to confirm what in practice is already the case that his team intends to formally take over the operating role from the current Tamboran management team.
16c on TSX. Disappointing. Not sure why this isn’t skyrocketing on these results.
Long...I appreciate your post. What bother me right now is the idea that you strike while the iron is hot. The news on the flow is great...better than great. To raise cash now would have been really easy for a guy like Nally. Industry veteran etc. Why would you not want to have the stock move high much higher on such good news and then raise let's say an additional $60 million or so to give you lot's of space in the event of a future market meltdown that could be caused by some shock that is unknown? Just defies logic. Especially for an accountant like POQ. He seems to be content to run down the bank account and not worry. Big mistake in my view. It almost seems like POQ is trying to keep us off the radar for some reason. As far as the valuations on paper we are worth so much more today than before. So why is he wasting this golden opportunity? What am I missing here. Will the big guys want to see more?? before a sale? Maybe.....so then give yourself the "skin" ( remember that term ) to be in the game in a big way. As I have said before "TIME FOR CHANGE"
B2B
"It also makes sense that if you raise new money in tranches, the second tranche almost certainly could be raised at a higher price"
The problem with your statement is that we heard the same thing about raising money THIS time if we had good results on the last well. We did, and now we're still talking about "not this time but next time".
The same about "the big money setting up and taking notice""
Agreed Mr Hardrock....One can clearly gather a lot by what was said and what was not said in the Q&A and put in writing and left out in the NR. It's always good to have a read of the latest accounts and notes to the accounts in the light of our CEO has shared with us. The latest as near all of you have witnessed says a lot about POQ's style which tries to ensure that he does not over commit or over promise because he's acutely aware there's increasingly the risk in this sector of problems come out of left field. That's what he's delivered over the past 10 plus years and that's why the board and shareholders including Bryan Sheffield have backed him.
There was no mention of any amendments to the partners' agreement so we can confidently glean the board's time horizons don't stretch to building pipelines etc required for the pilot delivery. I read into that the Company is focused only on raising sufficient funds - around USD 14-18 million dollars - to fund their 2024 programme. {It also makes sense that if you raise new money in tranches, the second tranche almost certainly could be raised at a higher price}.
There's no announcement yet on additional reserves, preferring instead to wait for 90 day test results on the SS1 well to increase current confidence levels in the flow rates in the deep areas beyond 85-90% to 95%. That's why the board will also be additionally keen to fund in full the first two 3 kilometre horizontal wells as it will further encourage the slide rule guys to pencil in and/or confirm little more than one year payback times on the new wells and higher probability of commercial development.
If the partners can achieve equivalent similar flow rates over the next 2 wells {i.e. >18mm per day} if nothing else this will ensure many of the larger US players will sit up and take notice and there will be increasing interest from the south, south east and east Asia sovereign wealth funds. I'm therefore increasingly confident that POQ and his team can monetise the company's asset in the next 12-15 months.
There are two proper-size wells this year, w/ fracs at the end of Q3-Q4 (page 12). H&P rig won't be terribly busy. Too bad it is on retainer (gotta be at least 50-60K USD/day. They like it so much, won't let anyone else use it and lower the burden).
I guess they still need to have EMP approved for this. EMP for EP98&117 is "under assessment"; we've seen greenies going berserk over it
https://depws.nt.gov.au/onshore-gas/environment-management-plan/emps-under-assessment
Generally I'd expect that you need to continue to participate to hold your spot in the block. Certainly there will be details, but 'backing in' and changing your mind generally comes with extremely heavy penalties to re-enter the block. IE participate and keep participating or forget it.
50m stage spacing is almost certainly over capitalized in a dry gas play. But, that's what you want ahead of a plant sanction.
Sinceday1: The recent Tamboran report highlights that these wells will be drilled in the 2nd qtr 2024. That same report shows that there are 60 stages planned that cover the 3km wells. These are in Philip's words - "All Singing, All Dancing Wells"
Here is the link to the Tamboran Repost if it posts: https://www.investi.com.au/api/announcements/tbn/6b35775d-f93.pdf
JamesL et al, When looking at the chart that POQ put up at the 8:20 mark of that Vancouver presentation in 2015 -- the estimated value per acre was $4009 if the exploration property was at the "Appraisal" level. That Appraisal level is only reached after a number of successful exploration wells have proven up the resource (which Falcon has done in the dark Blue core one million acre zone) and has "production" from horizontal wells.
This "production" stage has yet to be reached -- as that happens when we are finally selling gas into the Amadeus pipeline in 2026. Therefore, our next target is to reach that "Appraisal" stage by proving up the next two 3 km horizontals -- (which won't start drilling until a month or two after the 90 day SSH1 flow test is complete) and start selling gas into the Amadeus pipe as soon as we can.
To reach the much higher valuation of $18,000 per acre shown on the 2015 chart -- Falcon would have to be a full oil and gas company with 100's of wells already producing gas in that core dark blue area -- and thankfully POQ isn't looking at that scenario.
tnbird -- we could hopefully be looking at a larger valuation -- if a buyer wants all of Falcon'sw entire net 1.04 million acres -- which could move that sale to something closer to $1.5 Billion (maybe if we have a nice bidding war with more than one suitor)?
If we get to that "Appraisal" level by producing and selling gas from the Dark blue core area of one million acres -- then hopefully some of the major oil and gas companies will see the prospect of drilling one or two thousand wells in that Dark blue core area as being repeatable across that entire one million acres and pay up $900 million for Falcon's share of that Core area.
There is very little chance that any major oil and gas company would put that same $4,009 per acre valuation on Falcon's remaining 800,000 acres (out of Falcon's net total of 1.04 million acres in the Beetaloo) as there won't be any production coming from those shallower areas for many years to come. That would indicate that on that same valuation chart from 2015 -- that additional 800,000 acres could be assessed at the "Undeveloped" second stage (with some flow tests, seismic logs etc. but no producing wells). That chart shows a $844 value per acre -- which could potentially increase Falcon's selling price by another $640 million -- which might be a bit of a stretch but still possible??
I missed when they said the next two wells were going to begin drilling. Are they planning to start this quarter or not till later in the year ? And does anyone know what length they are planning on fracking as this last one they only did 500 m ?
For drilling cost between 2014 (https://www.canoils.com/Universal/View.aspx?type=Story&id=130467) to 2023 (https://falconoilandgas.com/2023/10/16/3286/#:~:text=Total%20costs%20for%20the%20drilling,FlexRig%C2%AE%20Flex%203%20Rig)
seems to steadily be around 12 million. Perhaps all past years' inflation has been covered by the more efficient Liberty Energy Inc rig (https://falconoilandgas.com/2024/02/26/stellar-ip30-day-flow-rates-advances-the-beetaloo-to-pilot-development/)
So for cost something like number of well times cost divided by partnership factors?
For Area pricing see Oleo's link and JamesL.'s post.
I posted this previously where I found the document on my computer and the date I have for the presentation is 16 June 2015. The stated market valuations on Slide 16 are as follows: Trends $40 / acre, Undeveloped $844 / acre, Appraisal $4,009 / acre, Production $18,489 / acre. If we are in "Production" in 2026, wouldn't that give Falcon a much higher valuation? I suppose I could dream, but perhaps my calculations are off. $,$$$,$$$,$$$
So, in reality we are potentially looking at a much larger base value well beyond $900 Mil US??
Tnbird - that is correct, and Tamboran has 1.9 million net prospective acres.