Firering Strategic Minerals: From explorer to producer. Watch the video here.
SS that's how I read it too.
SS that's how I read it too.
Looking back over the past 12 months one cannot get away from the fact that despite all the hype (and oh gosh there's been a lotof it ) 'The Empire Strikes Back' share chart looks increasingly deflated, trading well-off its highs from last year and now increasingly stuck in a narrowing trade range. The latest company presentation put together by Mr Underwood and his team is rather tame compared to earlier ones. It says a lot about a well drilled in Fayetteville more than 10 years ago but the excitement has gone.....I can only think that those institutions that invest in other companies in the sector like Chevron in the past 12 months may be a little wiser than others that put all their money into minnows
Yes there's still a chance that Falcon shares might bounce back to levels last seen during 2016 by the end of next year but don't punt more into this play unless you are prepared to lose all of it. Moreover don't overlook the fact that the Bruner shares are still overhanging the market and there's a handful of punters on this board alone desperate for you to average down so they can trim their stakes.
I hope we'll have a happy ending and in the the meantime I'm going to administer self control and wait 21-24 months for an offer letter to come through the post.
All eyes now on the flotation of Tamboran Resources tomorrow on the ASX.
Instinctively Mr Gonoles that seems the right reaction but on the other hand it's far from certain we are going to receive any credible news before the second half of 2022 that the Beetaloo is going to be commercially developed.
Origin have been struggling since they lost the star(s) in their development team, and no doubt their corporate HQ are holding back progress this year not because the rainy season surprised them and finished early but because the company is struggling with lower than expected cash flows. Some in their team might even think it make strategic sense anyway to sit back and watch the progress of others better equipped in different parts of the Basin.
Its very frustrating.. Falcon's management is in a difficult position. I have no intention of selling. There's no reason either to buy. And I would be very wary indeed of persons who try and persuade us there's an opportunity to trade here in any meaningful amount on either side of the pond.
Exxon let us down. Hess did not impress either. Looking back over the 5 years or so Origin have fallen short in several ways on delivery
I think we could make up to 8X current levels in the next 2 years. then again we might lose the lot. It's too late to sell. Like others I'm still willing to wait this out. But don't expect me to offer a smile at the end of this post.
I think in the end Mr Newtofo might be quite pleased that he bought some more shares at 7.5 pence last week.
i think he's a clever chap. I believe his move was calculated and rather clever and replicates the move of many bankers who have gone such a big nap on the Aussie currency in recent weeks as the country's terms of trade have so sharply improved. What's more rising LNG prices out of Darwin have partly this triggered this rise....and hopefully this will prove to be another jigsaw piece that is falling nicely into place.
Rising prices, falling costs, stronger AUD -USD cross rate and support from the federal government......All we need now when the rains subside is the drilling programme news to improve.
I still appreciate the risks. But the confirmation that we have wet gas rather than dry gas in two of of our most promising areas continues to give me increasing confidence that if the geological challenges can be overcome the pay day will be well worth the wait.
I think in the end Mr Newtofo might be quite pleased that he bought some more shares at 7.5 pence last week.
i think he's a clever chap. I believe his move was calculated and rather clever and replicates the move of many bankers who have gone such a big nap on the Aussie currency in recent weeks as the country's terms of trade have so sharply improved. What's more rising LNG prices out of Darwin have partly this triggered this rise....and hopefully this will prove to be another jigsaw piece that is falling nicely into place.
Rising prices, falling costs, stronger AUD -USD cross rate and support from the federal government......All we need now when the rains subside is the drilling programme news to improve.
I still appreciate the risks. But the confirmation that we have wet gas rather than dry gas in two of of our most promising areas continues to give me increasing confidence that if the geological challenges can be overcome the pay day will be well worth the wait.
Just read Newtofo's learned scribe late yesterday. they're very wise words indeed. Some of you would clearly benefit reading them one or two more times again. The only things that I would add constructively is that POQ's hand will be helped too in the next 18-24 months by NRs from Santos, Empire et al re. more drilling in their adjacent properties, the US government will no longer be encouraging fossil fuel development in fact quite the contrary, and Canberra will be looking to rein back some of the red tape players like Origin too readily agreed with Darwin.
Not sure why but there seems to be somehow a bit of confusion over currencies. A UBS analyst Down Under putting a A$700 million valuation on Origin's controlling stake in the Beetaloo is roughly the equivalent of A$200 million for FOG. Since FOG has c. 1 billion shares in issue this mathematically converts to c. 11 pence per share or CAD 0.19, a bit higher than where we are now but not too much a discount.
Our shares, some would say are one third under-priced today but realistically we need to factor in that FOG shares for the time will continue to trade at a discount given the company's minority share in its Aussie project. Hopefully our outlook will improve significantly in the second half of this year. I'm happy to wait but others have to realise that the prospect of a multi bagger from current levels comes with a degree of risk.
Fracking successfully the Kyalla 117 is not as simple as everyone's kids or grandchildren reciting the A, B , C...It's complicated but the experts that Origin brought in were it seems confident enough last month to persuade our team leaders to let them return when the rains go away in the second quarter and finish off their work. From our perspective POQ fortunately bought himself enough extra time in the first quarter last year with the refinancing, to now take a wait and see approach until the middle of this year.
I'm also reading into recent speeches down under that the Federal Government is now putting right some of the silly things that Origin and others wrongly conceded to the Northern Territories in the last 2 years that have been hindering the Basin's exploration programmes and ultimately making it harder for analysts to conceive successful commercial development. Give them positive flow news over 60-90 days at the end of the 2Q and then and only then will there in reality be more interest...And when they do , may we live that long for that moment, analysts will ratchet up their probability figure on commercial development and whoopee the long wait might be worth it.
Until then we have to live with the flip side. No one is going to make us a suitable offer today and if our multi level fracking programmes are ultimately less proven, we'll find ourselves forced to accept a so called generous offer of USD 0.15 in 24-30 months time which in discount cash flow terms (and recognising too the other places we could put our money to work) is the equivalent of not receiving much more than the current share price.
I may seem a misery so and so. But I believe our Falcon glass is now half full, not half empty...!!
Two more jigsaw pieces this week to help the Falcon story. And no surprise at all that Ms VegasGal is again quickest on the button to bring us this news.
Scott Morrison's comments at the press club in Canberra on Monday that referred to amongst other things an additional investment of A$200 million aimed primarily at reducing investment risk and fast tracking exploration in the Beetaloo region, is very helpful indeed. Most of the money will be spent on new roads (and drainage) and the budget for the latter has been increased to A$390 million. Second, he confirmed that the Federal Government is launching a new initiative to work with the Northern Territories to streamline regulatory processes and cut red tape. And third the government is setting up a team to develop a new Beetaloo Aboriginal Economic development Strategy.
Every step that the government takes like this will help persuade the business and credit analysts of the increasing probability that not only will the Beetaloo ultimately be developed but it might come sooner rather than later and could if a number of other things fall into place increase the discounted value of Falcon's investment in the Basin.
Empire's latest press releases does no harm either to Origin, Santos, Inpex....and little Falcon. it gives everyone additional slides and pretty maps to get over 'our message' to all the analysts and when the time comes in the Summer our team will probably acknowledge it will make it more easily for them to get their message across to Robin Hood investors in the US, Canadian TV and the Motley Fool and others on both sides of the pond.
What Falcon needs is the Kyalla 117, when the wet season ends, to ......and give us two months or more exciting flow numbers thereafter. If we get it we're on the way to what many of you all call a 7 or 8 'bagger' from these levels. If it again disappoints it's not very good news and we'll be fortunate ultimately to recover much more than the current price.
Current investors including me just have to be patient. Those of us who have trolley loads don't have much choice. it's very unlikely I'll buy more because no one in my humble view should have too much in a single pot like Falcon. But others might have a different strategy and who am I to argue against.
Meanwhile the Australians, like the US, the UK, New Zealand, israel, the UAE and one or two others who put up risk capital for the drug companies to develop the vaccines for their own countries and the poorer countries through COVAX will come throgh the
Mr Sneakysnake what will help your understanding is to go through how the analysts compile their numbers.
if you still have some difficulty further clues can be found by studying how much different 'players' can currently borrow against the security of their acreage in the Basin.
We have hope value yes. but we are still a long long long way from anyone developing 'the discoveries'. Saying that, many of us hold the belief that there are lots of chances that the odds in favour will reduce in 2021 and 2022 to the extent that new player(s) with deeper pockets than falcon will want to take us out..... Most people would further tell you that if Origin now makes giant progress with their drilling programme all the extra information available by the end of 4Q 2022 will make it easier for everyone to guesstimate the value of recoverable dry and wet gas...and oil in the Basin and whether overall its worth becoming a player and spending billions to bring it to market.
Like always Mr Newtofo you make lots of good points that personally I don't disagree with but analysts with their abacus poring through the Origin figures don't yet rate the chances of commercial development too highly. No argument there's great prospects but there's still quite a few things in their minds that have to fall into place for shareholders in Falcon and other parties with a direct or indirect interest to make significant sums of money from the Beetaloo. If I was wrong Falcon and Origin shares today would be a lot higher...but they are not. However it doesn't mean I do not rule out many of the pieces falling into place in the next 18 to 24 months or so, and many of us who have averaged down our entry price can ultimately make a turn on our suitcase of shares.
Let's hope when the dry season returns we get early news around mid year or not too long after that of a successful 60-90 day test of our wet gas in the Kyala formation. I want to hear further news too before they finish testing that we are starting more exploratory work in other parts of the Basin. And who knows we might even get positive news from Santos whose work progress I suspect might even proceed at a faster clip than the Origin team.
I might not be as cavalier as I was when I first took the plunge into these shares at 60 cents Canadian (worth circa 30 pence at the time) in Summer 2005 but I've wised up enough over the years to realise that I'm in a lot better shape now that the Bruner clan has been shown the door and the board of the Company today is better endowed.
Downside today must be minimal just based on what we already know. Upside will come in the next 24 months or so and I'm prepared to wait for it.
Mr Sneakysnake if you are a client of UBS, RBC and other houses who cover Origin and/or Santos in Australia you'll find their material very useful. The possible future value of Origin's stake in the Beetaloo Basin is always based on analysts' different views on probability of future commercial development.
if it can be shown in the next couple of years that there is a 40-50 per cent or more probability that the Beetaloo Basin as a whole is a commercial prospect Falcon's share is going to have some value and ought to attract two or more bidders. However right now most analysts agree that probability of commercial development is one in eight or one in ten only pending more news in the second half of this year and next in our acreage, and others' landholdings nearby or in adjacent lands.
Second, the Australian federal government's actions to speed up the discovery process and part fund some of the infrastructure spending very much assists us if in due course it can be demonstrated that it has cut overall lead times to commercial development. One less year on a DCF spread sheet can be significant when calculating value.
Third, Origin is not going to preempt any process before it completes in full the terms of its farm in agreement it signed with Falcon in March last year. If Origin only earns its 77.5% interest in the project when it completes an extensive drilling programme within an agreed timeframe. Failure to do so and Falcon will retain its 100 per cent holding, repeating again what happened before when POQ stood up to Hess and brought in new partners.
Fourth, investors in Falcon need to understand more just how much our position has improved in recent years as a result of Management renegotiating royalty agreements previously committed to by the Bruner clan. The company no longer has to pay four, five, six percent of its future revenues to third parties - any one of them on their own in their original form totally eliminated shareholder value.
Fifth, the company's ability to hang in there has further improved not just because we spend much less these days running the company but from the continued support of our institutional investors including the Russians. ...
2021 and 2022 might prove rewarding. but do not underestimate the level of risk even if it's less than it was before.
Can we monetise our minority interest that we have in the Beetaloo Basin? We don't have the answer yet but there are now increasing signs that we are starting to take steps that might ultimately might get us there.
Not everything is down to Origin. We're getting quite a bit of help too from Santos and the Australian federal government, and after last August's elections in the Northern Territories, both the governing party and the Opposition are weighing in with practical support. What's more I'm happy that the right sort of deal has been done with the local residents so that they too might share in any upside if it ultimately comes through.
But our option play is not going to be worth anything unless the yield from our wells can give prospectors a trading profit. There must be visibility too that proper transport links are going to be put in place. That's why the NRs that came through before and after Christmas are improving bit by bit (when taken together) the Falcon story.
Can we extract multi levels at the same time? That's beginning to look like quite possible. Are carbon dioxide levels suitably low?That's a yes, in fact a big tick. Is there increasing evidence now of NLG at different levels across wide areas of the Beetaloo Basin? Santos said yes last year. Origin/Falcon this week have given early confirmation that we have the same at different levels.
The government giving a subsidy to drillers on each well drilled in the next 2 years is nice too. The government offering their support on roads and a pipeline is another positive.
Notwithstanding the positives many of us I suspect have too large a weighting in our portfolios in this option play. Buying any more is not necessarily wise. The COVID pandemic and opinion swings amongst the political parties down under in the last 4 years has surely taught us that if nothing else. What I'm looking for in 2021 and 2022 is further news from Santos, Origin/Falcon et al that will attract new investors. I think it's coming and I'm prepared to wait.
I think what you say is fair Newtofo. Many on this board feared very negative news from Fog and Origin. This latest release therefore was relatively good news.
I'm now looking forward to the programme restarting in earnest in the second quarter once the wet season finishes. Hopefully the drilling pace will also pick up at the same time.
Two other issue that are important to us - gas and liquid gas prices have strongly rebounded down under after all the gloom in the middle of last year; and after the 2020 US election there's reduced likelihood of US gas being shipped to the Asian markets.
I think you are going to be pleasantly surprised Mr Longknife. Our situation in recent times on occasion has appeared not so rosy. Nitrogen had worked in other parts of the world. i gather it also proved most helpful in our Beetaloo bloc back in 2016. But now we have received proof of concept today that of course it works in different rocks and at a different depth in a different part of our acreage.
There's greater prospect now of multi layered extraction and that brings down costs, and we have more emphasis too of wet gas in recent news releases. Both are these positive news and ultimately increases the probability of a commercial find.
There's every reason now to look forward to the rest of this year when the wet season ends. and we clearly have a better floor under the current share price.
It's not easy to trade in these shares in any worthwhile quantity, but the news today at least holds out the prospect of an exit second half next year or early 2023 and in the meantime we're fully paid up for our share of the Origin project.
None of these things are a 'slam dunk'. Somewhat relieved therefore that Nitrogen has done the trick in January. My guess is we can fully expect further progress once the dry season returns in a few months time.
The last 6 months represent a positive turnaround in the Falcon story We can now envisage quite a busy 2021 with Origin not only running more prolonged testing on this site but also undertaking testing elsewhere (including may be in the original Amungee area) to further prove up multi layer delivery and 'deliver' similar flows in the same geology as discovered last year by Santos et al in their areas of the Beetaloo.
Lots of catalysts therefore for Falcon shares in the rest of the year and we're probably getting nearer to the time when management can return to the circuit (on zoom) to present the Company's story to investors.
5,6 or 7 days I gather is probably right. But what's even more important to know is when the 5,6 or 7 days start.
Sneakysnake below is offering very wise counsel on this.
I'm confident too that POQ as CEO of FOG will update us all as and when any information comes through. FOG has Republic of Ireland, UK and Canadian stock exchange rules that it must comply with in all circumstances. We can only but hope that the message when it comes is ultimately good.