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The Q & A covered a variety of points. In no particular order;
- The company costs roughly $2m a year to run (not specified which variety of dollars were being referred to)
- All the equipment required to perform the full EPT is already on site and the wet season is not considered to be an issue. The slight is slightly elevated so is less likely to be under water that other sites.
- POQ stated that as yet no shareholders money has been spent on the Beetaloo and we are fully carried throughout Stage Two and for part of Stage Three. The amount of carry in Stage Three dependS on the costs incurred in Stage Two and the likely costs of Stage Three.
- Sweetpea/Petrohunter was discussed at length. It is believed that shares are still coming onto the market, dealing is exclusively on the TSX. No figure for the amount remaining was given other than the 6.28% which was the last publically stated figure.
- The Santos test results on the Tanumbirini well due in May 2020 will we relevant to FOG as it will/will not confirm the continuity of the geology.
The questions raised by BuckeyeBuff on 08/11/19 at 23:41 will be answered in a separate post due to time constraints imposed by a journey to the airport.
Regards,
987jhg654fed321cba
The length of the horizontal was also discussed: why was the range so wide? What governs the length?? Apparently only 1,000 metres is required to get the information they require so if this data becomes available in the first 1,000 metres of drilling so much the better. GB estimated that they would probably end up drilling between 1,000 and 1,500 metres but he stressed that this was only an estimate at this stage. They currently have sufficient casing for 1,500 metres on site and any extra casing required could be brought in despite the wet season.
The factors influencing the length of the horizontal were costs, the fracking plan and the homogeneity of the target zone. It is difficult to be specific about when the horizontal leg will be completed as this depends on how long it is: a shorter leg is quicker and cheaper to drill.
NEWS WILL BE ANNOUNCED after the first 24 hours of the production test. For clarification, this will be the first 24 hour period after the flow rate has stabilised. This is expected to be in January but more specific guidance was not provided. Results on the full 90 day extended production test (EPT) will also be announced. It was stressed that the flow rates on the first 24 hours and the full 90 day test may not be the same.
At this stage it is hoped that by the end of April the rig will be moved to the Velkerri site to test the Velkerri Liquid Rich (VLR) opportunity for a repeat of the same process. It is unlikely that the rig will be moved before the end of April due to the difficulty of moving it during the wet season.
By the end of the summer we are looking at being in a position to compare the data from the KLR play, the VLR play and the Velkerri Dry Gas play. One of these will be chosen for the commerciality test which is Stage Three. It is possible that if blockbuster numbers came out of the KLR play, the JV may elect to advance straight to Stage Three on that well. Neither POQ nor GB would be drawn on the numbers for this scenario to be considered.
The purpose of Stage Three is to demonstrate commerciality to the industry. This is likely to involve two 3,000 metre laterals from the same pad and an extended flow test.
The last part of the presentation involved a discussion around the pricing of the gas from the Beetaloo. POQ stated that the pricing dynamics over the next 25 years favour FOG due to high domestic demand in Australia and demand from Asia.
To be continued again...
Falcon Oil and Gas Ltd – AGM Report 11/12/19
Present from Falcon Oil and Gas (FOG) – Philip O’Quigley (POQ) Chief Executive Office, Anne ***** (AF) Chief Financial Officer, Gabor Bada (GB) Exploration Manager
There were 15 – 20 shareholders present. No effort was made to determine whether they were private investors or were representing institutions.
The business part of the meeting was concluded quickly with all resolutions being passed.
After the business section came a presentation delivered by POQ followed by Q & A with all FOG personnel contributing. The geological insight from GB was especially useful.
The first point to note is that at the time of writing this report, the most up to date presentation on the website is dated 15/10/19. The presentation shown today is an updated version of this and it is assumed that it will be available on the Company website in the near future. The points noted are made in the context of today’s presentation.
The first page of the presentation showed a picture of the Kayalla site which was described by POQ as the poster child of drilling under the post moratorium regulations. He also noted that the site is 600km from Darwin and 2,500km from the nearest oil field. The Beetaloo basin is the size of Wales/Leinster (sic).
A brief history of Stage One was covered which can be seen in the presentation.
Notes begin a Stage Two and the order of delivery is slightly altered to include subsequent questions from the audience clarifying certain points. The work programme on the Kayalla 117 N2-1 well is scoped to thoroughly define the Kayalla Liquid Rich (KLR) opportunity. The first point was that the two core samples were taken from exactly the spot that was planned (POQ reference this more than once). They have been vacuum sealed and sent to the University of Calgary for analysis. This is expected to take 3 – 6 months. The samples showed traces of C3, C4, C5 (propane, butane, pentane) which is what they are looking for.
The JV has elected to drill the horizontal into the Lower Kayalla (LK) and that decision was taken after considering a number of different factors, not just the thickness of the horizons. The factors involved included the gas concentration, wire logs, homogeneity of the rock and also the proximity of a sandstone layer which ruled out the Middle Kayalla for the purposes of Stage Two. It was stressed that in no way was the Upper Kayalla (UK) written off, in fact the UK showed slightly heavier liquid components. Ultimately only one horizon could be chosen and that was the LK. GB mentioned that the decisive factor was the concentration of gas. There was discussion about the thickness of the layers and GB pointed out that this is subjective depending on how you define what constitutes the upper and lower boundaries. He also mentioned that 50 metres width was plenty for the fracking they had planned.
To be continued...
poods, go to company presentations.
jfhealy-
are you referring the post of Dec.10th or another one today, which I do not see? in either case shareholders are held spellbound! cheers, poods
Presentation now available at falconoilandgas.com !!!