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Flare April 7
Https://apps.sentinel-hub.com/eo-browser/?zoom=17&lat=-16.84089&lng=133.65215&themeId=DEFAULT-THEME&visualizationUrl=https%3A%2F%2Fservices.sentinel-hub.com%2Fogc%2Fwms%2F42924c6c-257a-4d04-9b8e-36387513a99c&datasetId=S2L1C&fromTime=2024-04-07T00%3A00%3A00.000Z&toTime=2024-04-07T23%3A59%3A59.999Z&layerId=6-SWIR&demSource3D=%22MAPZEN%22
Flare 13 March
https://apps.sentinel-hub.com/eo-browser/?zoom=17&lat=-16.84089&lng=133.65215&themeId=DEFAULT-THEME&visualizationUrl=https%3A%2F%2Fservices.sentinel-hub.com%2Fogc%2Fwms%2F42924c6c-257a-4d04-9b8e-36387513a99c&datasetId=S2L1C&fromTime=2024-03-13T00%3A00%3A00.000Z&toTime=2024-03-13T23%3A59%3A59.999Z&layerId=6-SWIR&demSource3D=%22MAPZEN%22
Much bigger!
Flare looks great, and seems to be larger in diameter than previous images???
I hear you Oleo. While a seller may have what they spent over the years in the back of their mind a buyer will only care about the horizon and what's to come. If oil and gas was still a thriving industry and not in wind down mode then maybe Falcon could do better but the reality is there is likely 20-30 years left in oil and gas at any significant level (as it will go on at a reduced level for way longer) and any buyers will know that Falcon can't unlock the value in the asset and the longer we have to give up stakes in drills thr value reduces. While share price isn't necessarily a good guage of value in this instance, it is what the market values the company at whether you like it or not and any purchaser will reference it as a jumping off point in any sale. If we book significant gas to our reserves that will help. It's just my opinion at the end of the day and certainly not worth too much contemplation from anyone to be honest. I just enjoy all the machinations on this forum and throwing mine in the ring. have been on both sides of a few deals in my time but every deal is different and what you really want in any deal is competitive tension between two interested parties. No doubt what the falcon board will be aiming for when the decide to execute their exit plan..
" I'd say it will be bought within 18 months for between 500m and 1bn and there may or may not be one more small raise before then. "
If somebody overtakes FOG for 500 million $, this would be a grand theft for me. I estimate that during all the years FOG has invested more than 500 m $ and even more true when you calculate the present value of the in the past invested money in the Beetalloo.
For example YPF goes all in now in Argentina to produce shale gas/oil:
"Argentina M&A Opportunity! YPF plans to offload a significant part of its conventional upstream business, enabling it to focus on its Vaca Muerta assets. The company's conventional production is around 135,000 bbl/d oil and 380 MMcf/d gas - this is a potentially transformational opportunity for the country’s small to mid-size E&Ps.
Welligence has done a deep dive on the divestment program. In our report, we analyze the following..."
There are people, companies who see a good value for shale gas/oil. It would be stupidity on the one side and a grand theft on the other side when FOG gets overtaken for small pocket money.
Frack,
Once the options expire worthless they're gone though. So another round to replace them wouldn't affect that I don't believe.
Excellent post frackme -- and most likely the correct scenario for Falcon over the next 18 months!!
The board are limited to 10% of the free float so they are about half way there. Hard to justify to your shareholders issuing many more options though when a share price is falling. Fastest way to get a vote of no confidence. We are at an interesting intersection. Real value is being created with these flow rates and will further increase with the results of the next 2 wells but if the share price stays static or declines it will make the route to more options very risky. I don't think you'll see the board issuing any more options this year unless the share price increases significantly. After all it's their fiduciary responsibility to create value for the shareholders, hard to justify it even if it's happening when the share price goes backwards. It's walking a tightrope. I'd say we'll sell in the next 18 months especially if the flow rates are good in the next two wells. Falcon hasn't the resources to unlock the real value and any purchaser will want to pick the company up cheap and not be paying anywhere close to the NPV that the empire article is putting out. I'd say it will be bought within 18 months for between 500m and 1bn and there may or may not be one more small raise before then.
This is the thing. They can just issue more options to replace any that expire....and more.
Frackme -- since we are currently trading just above 7P -- hopefully (LOL) we don't see 20 million of new options being granted at this year's AGM in July -- with a 2028 expiry???
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".