Firering Strategic Minerals: From explorer to producer. Watch the video here.
Before I get pulled up for my last comment , apologies to Scott Fitzgerald Senior it should have read Scott Sheffield.
It will be however interesting to see if the respected industry analyst at Cenkos this morning also offers a comment on the Tamboranj news.
Tamboran shares have opened strongly today on the ASX at 40 cents at a premium to the placement issue price of 37 cents and in the first couple of hours have risen further to 42 cents. (ORG-ASX shares are also up this this morning, back over AUD 5.00. The Tamboran formal announcement this morning indicates that the actual amount raised has increased since yesterday and existing large holders have invested AUD 15 million more (up from AUD 10 million overnight) alongside the Sheffield family.
What has intrigued the market Down Under is not just their past considerable successes of the Sheffield family in their Permian investment through Parsley Energy between 2008 and 2021 and the Tamboran board securing a new strategic investor, but the fact that the father Scott Fitzgerald Senior has pre-knowledge of the Beetaloo Basin as a non executive Director of Santos between 2014 and 2019 and Santos today is the operator of EP161 and where it has earned a 75% working interest from Tamboran.. Scott's son, Bryan Sheffield is now joining the board of Tamboran as a non-exec. director.
In the Tamboran statement lodged on the ASX this morning. Bryan Sheffield commented in the statement that '..the Beetaloo sub-basin has a number of the key elements of a world-class shale play. The mid-Velkeri shale has a large aerial extent, ample thickness and great rock quality.....'. Comments on the deal by analysts Down Under inter alia describe operators' development of the Velkeri play in the Beetaloo as one of the hottest shale gas plays on the globe.
The terms of this deal and the list of parties involved in it on the face of seem to have allowed Tamboran to make the placement without a full disclosure agreement under Listing Rule 7.1. Notwithstanding this, the Australian market has reasonably concluded that the Sheffield family and the original investors were very happy to invest in the placement. Applying 'near-ology' an often applied investment criteria, FOG and Origin shareholders should be equally content by the Tamboran announcement this morning..
In the meantime Tamboran confirmed that the company through Santos are on course to fracture stimulate both wells in EP161 and announce flow test results before the end of this calendar year. Tamboran have also confirmed that the new money raised will be used to accelerate the calendar year 2022 work programme and working capital purposes. After the issue there will be 747 million Tamboran shares in issue. That rather suggests FOG shares might be relatively good value.
The Tamboran board clearly did not want to pass up the opportunity to bring the Sheffield family on board but they at least offered existing large holders the opportunity to subscribe for more shares alongside them. Even so what's clear is that the overriding reason for this decision was the company's difficulty back in July in raising in full the money that they required at the AUD 0.40 issue price. What's going to be interesting tomorrow is to see if the issue terms fall within the rules that they don't have to issue a full disclosure statement on what information was shared.
More directly maybe more relevant to FOG shareholders LNG Shipping rates from Australia to Japan continue to hit record highs (50% higher than Atlantic rates) as the forecasts of a tougher winter in Japan, Korea and Northern China have increased.
One other thing worth considering as we come to the end of the dry season in the Beetaloo. ORG, FOG and EEG shares are up more than 20%, Santos despite the oil price rise is down 2%, and Tamboran has been unable throughout the period to trade as high as its 40 cent issue price. I rather think we might just outperform this group over the next 12 months as well.
Timing of this announcement by Tamboran is a little surprising. It's much too early for results from their Santos wells. And..If new shareholders are coming on board one might expect existing ones to be none too pleased. That being the case one envisages that existing large holders must be happy to top up their subscriptions from last July having been persuaded that an injection of new money today rather than in in 10-12 weeks time will allow the Company to complete on something that might not be available to them later.
I realise that this is a bit far fetched but the only support that I can offer for this theory, is that Tamburan only raised a fraction of what they originally sought to raise in July this year at AUD 0.40.
Other sensible theories of course are welcome.
In the meantime shareholders in FOG, Tamboran, Santos and Empire,... and the Federal Government of Australia and local politicians and peoples in the Northern Territories are all looking for positive results from planned fraccing at the end of 2021 and during 2022 that will contribute to the perception that the dry gas and wet gas in the Velkeri rocks in the Beetaloo and surrounding area is of such size that it is a commercial find. Bits of news this year have been very positive (and this was confirmed by POQ et al at the FOG AGM this month),but like it or not (and POQ said the same) we need a bit more before the market analysts and the industry increase their probability figure on their spread sheets that the Basin will be commercially developed. Even then we'll still need a Herculean effort by Management to garner support in the Markets beyond retail day traders to lift the trading range of the stock.
May i humbly suggest Mr Oleo that if you have not already signed up for access to the Cenkos' (broker's) research portal that you duly do so this morning. Others might also want to consider doing the the same.
Furthermore those already signed up might be assured by the Cenkos analyst's latest comments this morning that carries with it a buy recommendation for the stock and comment on FOG's (and others) continued progress to reach the appraisal stage on the Velkeri plays in the core and sub-core areas in the Beetaloo Basin.
To add a bit of colour to the numbers, but without making a specific forecast....Slide 19 on the presentation tells us that the current share price of GBP0.08 values the one million acre property at c. USD 120 per acre or c. GBP 80.00 per acre, given the fact we have c.982 million shares in issue.
USD 1,000 per acre would value the company at GBP 0.80 per share. USD 2,,000 per acre would value the company at GBP 1.60 per share ....and so on. Positive results from the Santos well at the end of the year will underpin presumptions that there are Velkeri shale dry gas and Velkeri shale liquids rich gas plays across the whole Origin and Falcon properties in the Beetaloo Basin.
High gas prices and strong regional demand (Slide 16) are positive factors. The stable political environment is another. And LNG is generally looked upon positively by those looking for what we need to rely on before we can fully wean ourselves substantially off fossil fuels in 2040-2050.
Everyone on this site should read in full the latest FOG presentation (November 2021) on their website www.falconoilandgas.com .
Proving commerciality of the Beetaloo core and sub-core Basins is the game plan in the next 12-15 months..... And main targets are clarified as the Velkeri dry gas play, and the Kyalla and Velkeri shale and hybrid liquids rich gas plays (Slide 24) which the maps show (Slides 18 and 23) are ubiquitous in FOG's acreage in the Beetaloo Basin.. And we're now of course in the countdown for the next set of flow news from the fracced horizontal Santos wells at the end of this year (Slide 6).
Management will be in the the chair on Friday at the AGM at 16.00 (Dublin time) sharing with all those attending further detail on our 2021 drilling programme (Slides 10,12 and 13) and how significant the Santos, Tamboran and Empire wells to the west of our properties (Slides 6,7 and 18) will be to our prospects.
Further confirmation of Velkeri flows (see details so far on Slide 7,10,12 and 26) from the planned horizontal wells will give the Basins the development green light, and what that might mean end 2022/early 2023 to FOG and Origin is also partly spelled out on Slide 19.
Clearly access to Beetaloo core and sub-core Basins if developed is going to be a sought after prize... For many countries in the Region it will not only help them maintain GDP growth but at the same time allow them to take out current coal fired installations that's causing increasing pollution in many of the built-up areas in the Region..
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Good evening Mr Newtofo. I fully endorse your comments. Apologies in this instance that our two messages crossed..
I rather suspect that if the Santos/Tamboran news comes up trumps as expected in the next few months I can see Cenkos getting busy at the end of the year/early next on putting together a road show for the FOG team to highlight the prospects of the Beetaloo becoming a commercial project during the course of next year.
The current share price weakness is increasingly showing signs of a seller in distress. I'm pretty sure the shares being dumped in London are not part of the original Petrohunter holder. The latter continues to be dribbled out by a firm of lawyers at a rate that allows them to continue to charge fees at their exorbitant rate. One can only therefore speculate that a party went in too big last month and did not do enough DD beforehand to identify that other than Cenkos we have no other brokerage house closely following our stock.
Hopefully level of support on the ground is set to change in the next 3 months or so but we'll need catalysts like good results from the Santos/Tamboran j/v and Empire Energy to put our shares on a firmer footing.. If and when this occurs I hope our management inter alia make better use of Bloomberg services, amongst other things requesting them to cover the Beetaloo in the US and Canada as well as in the UK
I agree with previous comments that the Kyalla will probably now be left to new partners to develop; nevertheless we've still managed to provide proof of wet gas in the Beetaloo . As long as there are further successes in the Velkeri dry and wet gas areas there's still the prospect of at least a 6 or 7 times bagger from these levels with the option premium payable by punters getting less and less. In fact holders are perhaps very fortunate that progress at last with the drilling and completion of the Origin/Falcon j/v agreement in sight is coinciding with a sharp pick-up of LNG prices in the region.
Santos and Tamboran confirmed last week that their Tanumbirini 2H and 3H wells were well ahead of schedule and drilling costs have been cut as past experience has paid dividends. The partners expect to complete their horizontal by the end of this month and then commence fraccing. No doubt they will keep us informed with results during the rest of the year and early next.. Equally important it will inform Origin/Falcon and Tamboran on their future plans to drill in their own acreage horizontal wells next year. What's more success for the Tamboran/Santos j/v will significantly increase Falcon/Origin's estimated Velkeri shale dry gas reserves in the Beetaloo to the east of the Amungee discovery.
Also progressing this month is Empire who are drilling a 2H well in their Velkeri liquids gas play around their Carpentaria well Analysts believe that positive results will also be supportive of Origin/Falcon's Velkeri 76 well that was spudded earlier in August, and increase expectations that Falcon/Origin's Velkeri wet gas prospects are ubiquitous around the border areas of the Beetaloo property.
Prospects of wet and dry gas in commercial quantities will if proven transform prospects for all the players in the Beetaloo and adjacent properties and speculation will almost certainly increase sooner rather than later that there will be a competitive auction for the assets,
Don't count your chickens yet. We're not over the line. We have had too many false dawns over the years. However the involvement of Tamboran and Santos is helping tilt the odds more in our favour. What's more, rising demand and cutbacks in supply partly political and partly global weather conditions is spurring sharp rises across the globe in gas prices and future expectations
One can assume Mr Newtofo POQ has spies who tell him who is selling and who is buying millions of shares.....Gentlemen like POQ most likely have learnt over the years how to read these boards and spot those who are pumping and those who are ultra rude to suit their own positions. Directors too in this type of company have a little red book for those that they do not wish to engage with.
Turning to more interesting 'titbits' the numbers in the Origin report and accounts are very illuminating and re-confirm what others have wisely commented on in the past. Origin on its own does not have the resources to develop our acreage in the Beetaloo. Its interests medium term are therefore aligned with ours with their need to go to the market once they complete their investment next year and acquire their 77.5% property share . There was possibly some conflict recently as the Company would have been concerned that its margins were coming under pressure (its ROCE fell in the latest period to 4.6%) and it had therefore the need to put a cap on Group borrowings. Fortunately their prospects alongside those of FOG are set to pick up strongly in the second half of next year, underpinned by inter alia the strong LNG price in their markets.
If investors believe we can ultimately commercialize the Beetaloo Basin end 2022/early 2023 one envisages the two two partners now counting on minimal competition in the rest of the world and giving a message to buyers to buyers that the Basin is much nearer to the East Asia markets than the Strait of Hormuz or the Gulf of Oman, and it's located in a relatively good stable environment.
It's increasingly clear that our CEO and the Board clearly believe they are going to have a sensible story to promote over the next 15 months or so. yet another positive sign is that a person with the calibre and experience of Mr Joe Nally has been persuaded to come on board and roll up his sleeves. His original background with Williams de Broe is blue chip and everyone ought to recognise in our community his achievements in recent periods building up his Cenkos business.
Bringing on board Camarco is another good move and ought to deliver in due course institutional support that former Management (Bruner and family et al) preciously won but subsequently recklessly threw away. Trading in the shares in the last week or so and before ought to have educated many of us here that any sustainable share price advance needs more than good news; it must go hand in hand with investors taking 'a longer punt' than too many of the small gamblers here trying to make a small turn in and out in a few hours. Others more wise on this board have made the same point.
I'm hoping like others inter alia the upcoming test results from Santos in the adjacent property could prove the big catalyst/game changer in the next couple of months. In this context one can now see glimpses on how the Company's Board
are properly planning ahead.
The Amugee news was great. What we need now is positive news from a horizontal frac. And when we get it the level of risk that hangs over us as to whether our Basin will ultimately be commercially developed, will dissipate, and any calculation of value per share in future will be calculated more positively with lower discount rates.
In the meantime winds in Europe (seriously) have been blowing the wrong way and have caused a continental energy shortfall, and the US is struggling the same with too much energy infrastructure in or around Louisiana and the Democrats blocking new gas pipelines flowing west to east. That's why the price of natural gas in all markets is sharply up. And new gas fields remain also in short supply.
Personally I did not foresee any opportunity to pick up more stock after recent announcements below 10 pence/17 cents. But I don't think either that these levels will last very long.
With the greatest respect Mr Poods you really don't look so cute carrying on with your silly personal attacks against the Chief Executive and the board. Like most others I normally filter out your comments but I've seen them this time and don't be surprised therefore if Management tracks you through LSE SE and takes action....
Very sound advice as usual Mr Newtofo. Only quibble from my end is I don't think we can count on at this stage more than 50 pence a share as and when Origin completes its programme next year. On the other hand if Origin's contractors can prevail with the Kyalla and they are also able to deliver some good news on our forgotten 4th play, the oil and condensate play in the Hayfield sandstone then 10X may yet prove quite prudent.
II don't believe the big boys and the analysts yet are going to adjust the discount rates in their future cash flow spread sheets .They will want to see further evidence that the Beetaloo will be commercially developed. And therefore you're right on the button when you say that the catalyst for a further big run-up in the FOG shares (and one that will stick) will come from the Santos and Tamboran drilling programme to the east of our property expected now before the end of 2021. Who knows Empire (EEG) might help us too and if they have a success Mr Underwood will try and put it on every TV station and news outlet all the way round the world.
One last point. Anyone topping up at these levels is making a relatively safe bet which will surely become clearer in the next few weeks if as expected the Origin contractors come up trumps again, -this time in the Velkeri wet play.
I suppose Mr Underwood is quite pleased with his cheeky post. Over one million shares traded in his EEG stock this morning. The shares initially rose over 18% to AUD 0.325 but have since come back to AUD 0.30.
The Australian market, like the Dutch market, is rather plagued this year by the kids launching legal cases against companies like Macquarie and Santos on the basis that some of their 20 or 30 year projections on their green agenda might not be achievable. Both main parties at the Federal level and the Northern Territories are very keen to encourage the Beetaloo to be developed if commercial. The current Fed government also put up a fund last year to assist companies like EEG and Santos.
Until Origin has fully complied with the terms of their joint agreement with Falcon by the end of 2022, Falcon retains its 100 per cent interest in the Beetaloo.
in the meantime one of the oddest things that have happened to Falcon over the last 5 years has occurred Down Under this morning in Australia. Mr Underwood, the Managing Director of oil minnow Empire who have acreage to the east of the Beetaloo, has taken the decision this morning to issue its own press release devoted almost solely to republishing last Friday's Falcon news release. It's either a prod to Origin or it's an indirect way of alerting the analysts in major firms like UBS down under that we may now be a little nearer making the Beetaloo a commercial find.
Good stuff Mr Newtofo. Very timely and very helpful indeed..
What we're all praying for is one out of three wells coming up trumps over the next 90 days. And if we get two.....well, that would be very nice......
I think management are trying to be as helpful as possible to the many long term investors who frequent this board. The two press releases in the last week are pointing to possible very, very good news in the not too distant future. The house broker Cenkos has also put supportive comments on their analyst portal.
Confirmation of what Management is expecting on either is clearly going to be a game changer for our minnow play as well as the whole of the Beetaloo Basin. Fingers therefore are firmly crossed. It's been a long wait. Upside from these levels is quite large.
If you combine the Cenkos update with the latest Empire press release on the LNG price outlook down under, one might even conclude FOG shares this morning are a good speculative buy for those not overweight in the stock.
Well said Messrs. Sneakysnake and Newtofo. Right on the button.
In the meantime it's increasingly clear that Origin is a wounded beast. It has cash flow difficulties in 2021, and an increasing need ton cut their links to coal...