W.W. and ITguy, While Santos decision to postpone on the Tanumburini well into the Velkerri is certainly disappointing -- it is not too big of a surprise now that Santos's market cap is actually lower than Origins currently. Santos already has a number of gas exploration projects that are at much more advanced stages, so delaying the Beetaloo when they are cutting capex down the bone makes good sense.
Fortunately for us -- the Beetaloo is Origin's primary and almost sole exploration play! Plus, any delay by Origin beyond 2020 would allow Falcon to reopen the Joint Venture agreement for either an increase in Falcon's percentage ownership or other penalties that Origin would certainly want to avoid given their expenditure in the Beetaloo to date.
schlemiel, a double whammy of bad news today.
Origin is shutting down the Kyalla until at least July, but most likely beyond that as indicated with the press release - so the Velkerri wet may not even be drilled this year. Even the Kyalla could be at risk as Falcon's press release didn't lend itself to any real confidence in Origin even being committed to restarting the Kyalla.
Plus one of our best sleuths has sold out of Falcon, but I am hoping that schlemiel will still keep digging up get news bits for us -- with a view to buying back in the future. A tough day that will most likely get allot tougher as this news sinks in -- so keep my old mantra in mind with this disappointing bird.
Stay safe and healthy everyone -- as we now have a few more years to go on this one -- before we see any real returns!
"****e" -- that is really depressing news, but given the fact that no one else is working -- it is somewhat understandable. However, a totally different scenerio than what was in the planning stages only ten days a ago!
ITguy and tnbird, just a follow up note that the fracking crew and equipment are all on site at the Kyalla 117 well, with the crew more or less quarantined -- due to the fact that no one can leave and return again during this current corona outbreak. They also have everything they need to complete the fracking stages on site already.
Just a quick update, but I have heard through the jungle grapevine that things are moving forward at the Kyalla 117 well site, and hoping we hear more news soon on how the fracking is progressing. This makes sense as there have been a few reports to date that indicate that with proper precautions -- outdoor workers in remote locations are some of the best protected employees around. Stay safe everyone -- as we all need to be healthy and still here in a year's time to see this long suffering investment pay off for all the patience...............................................................................
With everyone rightfully focused on the health and well being of their family, watching Falcon drop closer to all time lows is not as stressful nor as much of concern by comparison to the current pandemic.
However, -- it would still be nice to get an update from POQ on when or "IF" the fracking is going to proceed under the current virus threat in Australia? The weather has been better than perfect in Daly Waters for the past two weeks, and the added water monitoring bores should be complete by now. Therefore, the big question is whether Schlumberger is going to start the fracking or has all work on the Kyalla 117 well been suspended indefinitely???
VegasGal, I did the same with buying a bunch at 16.5 cents on the TSX -- but didn't have any spare change to take advantage of the 12 cent price yesterday -- darnit.
You said " It is a roller coaster until solid news comes through" which it certainly has been, but on a positive note we should be getting news very soon on the fracking getting started with the water bores almost complete. It won't be the solid news that we need for a real updraft in the share price, but it will certainly be some welcome news that should put a higher floor under this stock now that Origin is somewhat back on track.
Yes tnbird, and watching nervously how quickly the corona virus spreads in the US. The number of travelers going north and south through our borders with the US, and by air, means that Canada will get hit much harder with this virus. Canada has been doing an excellent job of tracking and testing with this virus, but with widespread community transmission now happening in the US -- all this good work in Canada will be for naught. Canada will never shut the border with the US -- so there is no stopping the virus any longer in Canada, but that was probably the case anyway. World wide travel has all but assured that this virus will spread through out most countries before a vaccine becomes available -- hopefully later this year.
dprussky, I am holding steady as well, but certainly expect this corona virus situation to overshadow any positive news that we might get out of the Kyalla. Fortunately, any real significant news on the liquids test won't come for a few months and we may have found a bottom in all the markets by then. Trump's mishandling of getting tests out in time to curtail the spread in the US is now too late -- so there is more dramatic news to come once the testing shows how far and wide the virus has already spread in the US. Falcon shares are getting sideswiped by events, but with no debt and two of the biggest and best companies in Australia (Origin and Santos) doing our work for us -- the future still looks very bright, so I am holding and ignoring the market gyrations as best possible............................
I picked up a bunch more yesterday and today on the TSX well below my old break even point and it didn't seem to help in the slightest -- as the TSX price is down to only 15 cents with no real support until 14 cents -- sheesh. The only good news is that the Falcon share price doesn't have as far to fall now -- if the Kyalla test doesn't show real commercial prospects. Even though it would be a ridiculous price -- given the magnitude of the Velkerri B shale, I have been somewhat expecting a drop back down to 10 cents on the TSX - if the Kyalla doesn't perform. This is the Rodney Dangerfield stock of all time, and you can always always buy it cheaper -- darnit.
A couple of off the cuff thoughts on this market shake up in oil. 1. This is the Saudi's giving Putin a $100 million dollar a day slap in the face for not agreeing to cut production in the face of the Corona Virus curb in oil consumption. This won't last more than a few months -- as Putin will face a severe recession if his 10 million barrel a day oil production is losing money every single day. 2. This does not have any long term effects on the price of natural gas in Australia or in Asia -- as the Beetaloo gas is at least three years away from any serious production levels. 3. There was a world wide recession in the cards before the Corona Virus showed up, so there is no doubt that there will be a full on recession this year -- that could keep a lid on Falcon prices for a few months. 4. The future for Falcon is not the current day to day trading of oil stocks, which has all energy related holdings down today, so anyone with the original time horizon of a year or two on Falcon -- has the opportunity to average down. 5. If the Falcon allotment is already full -- then ignore this gyration and the mood swings as this will not stop the large players like Inpex, Santos and Origin from carrying on their business plans for future natural production from the Beetaloo.
Otd2000, yes -- this added water bore drilling is due to the 180 degree change of direction for this new horizontal (due to the sidewall collapse on the first horizontal). Water bores were in place for that leg, but I am fairly sure that with the reverse direction the NT Minerals dept wanted additional water monitoring taking place along the new direction too. Since water monitoring for this general area has been in place for much longer than six months now -- I believe these new water bores only need to be added for an extra level of caution, but won't require the six month time period.
dprussky, I am sure the site was wetter last week, but the 7 day forecast for Daly Waters looks really good for getting the water bores drilled asap. Then Origin and Schlumberger can get back to the fracking the 1600 meter horizontal -- when those water bores are in place for monitoring that the shallow aquifer remains pristine. Here is that same link to the Daly Waters forecast, so just clik on the little black square where is says Daly Waters and the seven day "no rain" forecast will pop up.
Sorry -- Bad math on my part. One million shares of Falcon would be "one tenth" of one percent of the current total number of shares and not "one thousandth" of one percent as I stated in the previous email.
nerves, just a couple of outside the box thoughts. As Falcon is a TSX listed company -- if you buy just a few shares on the TSX -- then you will automatically get mailed all of the corporate stuff on AGM's or a Buyout etc as I get those in the mail along with proxies etc. However, you will be getting a full run down on any buyout proposal right here on the LSE bullboard -- as any buyout offer that Philip gets, that is worth putting to the Falcon board of directors, will become public knowledge and posted here pretty darn quick.
I posted this a year or two back, but just for a refresher for any that are new to the board -- here is the most likely scenario of how a buyout would be structured from a tax and corporate point of view. Falcon Australia would not be sold, but rather Falcon Canada with the listing on the TSX would be sold -- as this will incur just one tax bill in Canada. If Falcon Australia were sold -- then there would be tax to pay in Australia and then tax to pay in Canada when the proceeds are repatriated.
With Falcon Canada being sold -- the Karoo assets would get dumped out ahead of time into a new company (Newco) and every current Falcon shareholder (those still holding at the time of the sale and haven't already sold their shares into the market) would receive a prorata number of shares in the Newco. For exampe --if you held one thousandth of one percent of current Falcon shares at the time of an accepted offer (one million Falcon shares approximately) -- then you would receive the same one thousandth of one percentage in the Newco. This Newco would be a penny stock to start, but at some point could be worth some good money -- if South Africa ever gets some good governance -- as our piece of the Karoo is probably one of the ten best shale plays in the world.
Geovanni, your math is fairly accurate from a total resources point of view, but just for some fun with numbers -- here is only a very small part of what a future buyer would be taking into account before making any kind of offer.
Any future buyer of Falcon's 30% will be looking first at their capital cost of recovering their share of the 85 TCF of gas from the mid-Velkerri over what is hinted at by Origin - as a 25 year life span for the Beetaloo. Then, after the commercial flow rates are fairly well established -- they would need to make a very risky forward assumptions on future gas prices to see what their net profit may look like for each of those 25 years. Any offer to Falcon would then be discounted by what is called a Net Present Value calculation -- which accountants tend to peg at 10% of that future profit stream. Any buyer of Falcon's 30% would also be required to have very deep pockets to become Origin's partner going forward. The capitol costs of infrastructure and drilling 1000's of wells will require many $billions -- but the rewards are looking better as we progress -- especially if the lower Kyalla performs as we all hope.
Hey Wet, I am "fairly sure" the Kyalla's 24 hour initial flow test result will be considered a material event for Origin.
I am "positive" the Kyalla's 24 hour initial flow test result will be considered a material event for me! LOL
Thanks Longknife, I wish you were right, but when I posted a week ago -- that was taking into account the new requirement for more water bore monitoring holes to be drilled before fracking can start. So we are still looking at April to early May for any indications on gas flaring or initial flow rates. What might help with getting more done this year will be an announcement SOON that the Ensign 963 rig is moving to the Velkerri wet site, since most of the civil engineering work is done, but the current heavy rains would seem to exclude that possibility for another month. Would anyone know if the Ensign rig is required for the water bore wells -- as those water bores are very shallow -- so hopefully the Ensign rig can start packing up for the Velkerri fairly soon -- now that the horizontal is complete???
This announcement from Origin/Falcon is a pleasant surprise and a disappointment all wrapped up together in one. Great news in that Ensign was able to drill the full 1500 meter horizontal without the sidewalls collapsing like the first 700 meter leg, along with positive indications on the gas shows etc. Disappointing -- in that fracking won't even start now until probably April -- which means this one single well in the Kyalla will be well over six months to complete - so we might not even see the second well in the Velkerri wet completed this year, and there isn't a chance in hell that Origin will get to any part of the stage 3 drilling this year -- contrary to last year's announcements on timelines.
Some news finally from Origin, but you have to wonder why Falcon didn't put out a release. The following is from Origin's presentation to investors -- with news right up to current on the Kyalla.
Kyalla shale liquids rich gas play
• Vertical section successfully drilled in November 2019
• Operational issues encountered on initial horizontal section
• New horizontal section successfully drilled in February 2020, preparations
are underway for the next phase
• The well has been drilled to a total measured depth of 3,809 metres, which
includes a 1,579 metre lateral section
• Results to date demonstrate good reservoir continuity, conductive natural
fractures, and continuous gas shows
• Results from the production test expected over Q4 FY2020 and Q1 FY2021
Velkerri shale liquids rich gas play
• Environmental approval to drill and fracture stimulate granted in December
• Drilling of the Velkerri Flank is planned to begin in the dry season (Q4
Stage 2 objective
• Flow liquids rich gas to surface during the production test