The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
Just "One" more small but important clip from the Tamboran report out today -- (and then I will stop posting -- for this week anyway) -- so that other LTH posters can get a chance to get a word in edgewise -- LOL!!!
This paragraph below in reference to the amazing flow rates announced two weeks ago -- is where I think Brian Sheffield will be focusing his conversations with big shale gas players in Texas -- as he works towards finding partners to develop the first one million acres in the Beetaloo. While there has been some issues with Tamboran (like the Amungee H2 fiasco and the exorbitant G&A overhead expenses) -- it is worth noting that Falcon might not have reached this proof of commercial gas flows with the SSH1 well -- if Origin was still our lead operator. I am fairly sure it was the engineering expertise brought to the Beetaloo by the ex-Pioneer team and their new completion engineer -- (along with all the expertise from Faron Thibodeaux's team) that finally got us that long anticipated proof of commerciality in the Beetaloo.
"The result, we believe, has de-risked more than
1 million acres of high-quality shale at depths
below 2,700 metres (8,202 feet) and validates
the Company’s view that deeper shale areas
in the Beetaloo Basin are likely to be the most
prolific and optimal areas for the location of the
proposed pilot development.".
"This normalized rate is the highest rate
delivered in the Beetaloo Basin to date and
exceeded the Company’s pre-drill modelling
expectations"
A bit of weekend reading for any that are interested -- while we wait, and wait and wait a little more!!
This update has a paragraph (copied below) that shows that Tamboran has completed all the obligations that Tamboran inherited from Origin regarding the 9 wells and total dollar commitments. Falcon still has another 3.75 million dollar credit remaining that will most likely be used with one of the two full length 3 km horizontals to be drilled later this year.
"During the SS-1H well drilling activities,
Tamboran gave notice to Falcon Oil and Gas
Australia Limited (Falcon) that all farm-in
commitments have been fully satisfied, having
reached the associated cost carry commitment
in accordance with the 2014 Falcon farm-in
agreement".
https://hotcopper.com.au/threads/ann-half-yearly-report-and-accounts.7905312/?post_id=72912624
.
Longknife -- I am almost positive that Falcon will be sold for at least twice your 30 cents US number, but the biggest question still remains the same -- WHEN??
Brian Sheffield will most likely be the driving force to see Falcon taken out by one of his Texan associates -- like EQT or possibly Chesapeake amongst others. Having Falcon hanging around beyond the Pilot Production program makes no sense for someone like Sheffield -- as he will want to have one of the major US shale gas companies as a long term deep pocket investor, with a buyout of Falcon the most logical long term solution.
Just the Dark Blue Core area of the Falcon permits in the Beetaloo will require anywhere from 1000 to 2000 3 km horizontals to drain that low CO2 shale gas over the next 15 to 20 years. That will be a very lucrative purchase of Falcon 22.5% interest for any big shale gas player (for most likely something just under a $billion). However, that Falcon purchaser will need to have another couple of $billion to invest in their 22% share for all of the very expensive infrastructure, pipelines, dozens of new well pads, and a huge gas processing plant for the next five years -- before the really significant profits from $12 Aussie gas start to offset the forward costs, (at which point the potential buyer will will be on a roll towards $billions in profits over the following 10 to 15 years).
Rsacas -- promoting this stock to some of the big oil and gas investment ETF's and brokerages would certainly help generate new buyers -- as there doesn't appear to be more than a couple of day traders wrecking havoc and pushing Falcon down.
That being said -- without new deeper pocket investors we are somewhat stuck with this ridiculously low price point on Falcon due to the fairly clear timeline on smoothing the path forward to the full Pilot Production plans. Tamboran and Falcon both need to secure more funding to cover the next two full length 3 km horizontals later this year, and position themselves for further funding steps in 2025 for the remaining four horizontals (if POQ hasn't found a buyer before then).
Tamboran needs to complete their move to being a US listed company, and we need to see how strong the EUR is after the 90 day flow test is complete -- with both events taking place around the end of April. The satellite shot seems to be indicating that the 90 day flow rate should be solidly in the higher EUR category!!
However, without some solid promotion to the bigger gas investment banks -- that can clearly see that Falcon's side of the recoverable gas in the Deep Blue Core area alone is in the range of 5 TCF of gas -- I am very concerned that we won't see any respect for Falcon's position in the Beetaloo until the full length horizontals are completed.
805slo -- your question has validity -- if you read what this less than diligent research piece has stated in error about which companies are currently involved in the Beetaloo and the crap they state about Viktor Vekselberg.
"Sheffield is strategically positioned within two of the three companies operating in the Beetaloo" -- with no mention about Sheffield's over 9% interest in Falcon.
Then a bit further on the following misleading statement: "Moreover, Sheffield’s collaboration extends to Russian oligarch Viktor Vekselberg, the largest shareholder in Falcon Oil & Gas, who remains a non-operating partner of the Origin assets within the Beetaloo".
Sheffield has had absolutely zero collaboration with Vekselberg -- as for all intents purposes Vekselberg has zero input into Falcon affairs anymore -- since the sanctions against him were put on two years ago. BS only deals with POQ as far as his large investments in Falcon are concerned
The three companies that are operating in the Beetaloo currently are -- Tamboran, Empire, and the largest permit owner in the Beetaloo Basin -- Falcon Oil and Gas (as Santos has suspended all of their Beetaloo operations currently).
There is no mention in this article of Falcon's long 14 year history in the Beetaloo -- nor any mention that it was Falcon that created ALL the forward momentum in the Beetaloo by fracking the very first horizontal just before the moratorium kicked in 6.5 years ago. Without that frack going ahead 6.5 years ago -- (proving the existence of the massive gas resource in the mid-Velkerri shales) -- the forward momentum in the Beetaloo could easily have ceased due to all the Pepper Inquiry's somewhat restrictive new recommendations that were adopted.
More importantly -- Brian Sheffield's investment to date in Falcon is almost twice the percentage of his Empire investment at just over 9 % interest in Falcon (and most likely higher if BS has been snapping up cheap shares of late like he was doing a year ago). Sheffield's total dollar amount invested in Falcon is much more than double his investment in Empire -- especially when his extra $6 million purchase of the 2% ORRI is added in to the equation.
Shanker11 -- Origin789 is correct about the Lower Kyalla well that drilled a few years back with minimal successful flows, which was another one of many disappointments -- as that zone, if the experts can eventually frack it successfully, is almost 100% located only on Falcon permits.
However, there was a vertical well drilled on EP76 into the mid-Velkerri formation and the eastern side of Falcon's three permits -- that the DFIT tests showed a much higher level of condensates. That EP76 vertical well is the closest well to the three mid-Velkerri Empire's wells that have shown higher condensate levels too, and appears to be at the same depth. This EP76 well certainly has added value for any future buyer of Falcon's interest in EP76, but the lateral extent of that formation is not fully known. and the shallower depth of the mid-Velkerri on the eastern flanks seems to have considerably lower overall flow rates as evidenced by Empire's three wells.
By comparison -- the much deeper and higher pressure Core area, that the Pilot production plans are set for in the SSH1 area of the Beetaloo, has a much higher (dry) gas flow rate across what appears to be a one million acre similar depth mid-Velkerri zone. This one million acre (darkest blue on the Falcon Presentations) area is also much closer to roads and pipelines infrastructure than the EP76 flank well that Origin drilled. Plus the very high selling price for natural gas in Australia ($10 to $12 range as compared to under $3 in US and Canada) makes the SSH1 one million acre zone the first priority for us, Tamboran, and B.S.
Tnbird -- really really disappointing to see the old adage is back again with a vengeance -- sheesh. Maybe Marshmill is getting a chance to buy a few more, but I am never buying another share and would like to get rid of a bunch, but that is a long long way off now.
Tamboran is still holding very nicely at just under 20 Aussie cents -- so the only thing that makes sense to me is that Riddle has been on the promotion campaign for the past year and virtually nothing from Falcon over the past year!!!
Odie -- one thing for sure is that we don't EVER want to have "good news again" with Falcon!! -- as I will go broke on any more good news -- sheesh
We are down 25% from the highs on absolutely stellar news on flow rates from the SSH1 well and just as soon as we have our first real confirmation of commerciality -- down down down this stock goes. My only take is that there has not been any promotion at all -- with only long term holders and no new buyers even remotely interested in a 500% return over the next 18 to 24 months. There needs to be the same as in prior years -- when lots of dog and pony shows drummed up new investment banks and new investors -- as we have none of that now.
You would think that there would be many oil and gas investment houses that would seriously want to have a piece of what the Northern Territory's Chief Minister is calling a game changer for all NT residents, but not a single one!!
Smallfish9 -- I have the same request as Oilcountry99's question below about a reasonable valuation in the next 12 to 24 months -- (knowing that there are a lot of unknown variables that can change any estimate of that valuation in the next 18 to 24 months).
Here are a couple of paragraphs from my earlier posts (in reference to POQ's old chart from 2015 and the four stages of acreage valuations. From your perspective, and given the current pricing for nat gas in Australia -- do these valuations have any current validity -- when Falcon finally has some serious buyers looking at the DATA room, like Inpex or EQT??
"If we look at JUST the one million acres in the Core deep blue area of the Beetaloo (after "production" is happening by 2026) -- and we give Falcon that same valuation of $4009 per acre for Falcon's (22.5%) 225,000 acres share of that one million acres -- we would be looking at $900,000,000 US to Falcon's side of the ledger".
"We might be looking at a larger valuation -- if a buyer wants all of Falcon's entire net 1.04 million acres -- which could move that sale to something closer to $1.5 Billion (maybe if we have a nice bidding war with more than one suitor)"?
"If we get to that "Appraisal" level by producing and selling gas from the Dark blue core area of one million acres -- then hopefully some of the major oil and gas companies will see the prospect of drilling one or two thousand wells in that Dark blue core area as being repeatable across that entire one million acres and pay up $900 million for Falcon's share of that Core area".
"There is very little chance that any major oil and gas company would put that same $4,009 per acre valuation on Falcon's remaining 800,000 acres (out of Falcon's net total of 1.04 million acres in the Beetaloo) as there won't be any production coming from those shallower areas for many years to come. That would indicate that on that same valuation chart from 2015 -- that additional 800,000 acres might be assessed at the "Undeveloped" second stage (with some flow tests, seismic logs etc. but no producing wells). That chart shows a $844 value per acre -- which could potentially increase Falcon's selling price by another $640 million -- which might be a bit of a stretch but still possible"?
GingerAle, Falcon's full original nine well free carry from the original Origin deal ended with the SSH1.
Falcon got an extra $3 million contribution out of Tamboran's pocket on the Amungee 3H one km horizontal that H&P completed last November ($3 million out of the $6.75 million that POQ negotiated as a Tamboran extra payment towards one well in 2023 and one well in 2024 -- when POQ acccepted the revised Tamboran/Origin deal). However, the cash balance for Falcon has gone down significantly -- as Falcon still had to cover their remaining 22.5% from both the drilling costs on the Amungee 3H along with 22.5% of Tamboran's G&A overhead (which is generally a ridiculous amount of G&A).
Falcon has the remaining amount of $3.75 million Aussie added/extra contribution by Tamboran -- that can be used anytime after July of this year -- so that will help reduce Falcon's 22.5% of the next two 3 km Pilot wells . Falcon will still need to come up with another approximately $15 million for Falcon's remaining 22.5% of the next two Pilot wells -- plus 22.5% of Tamboran's ridiculous G&A.
RobRoy -- great article and the most encouraging part comes from the Chief Minister and the Resources Minister for the Northern Territory. There comments below bode very well for the EMP getting passed fairly soon, (and fortunately the anti-frack bunch missed the deadline of December 31st to submit any written dissensions to the full Pilot EMP). Maybe the politicians will buy a few Falcon shares and get this darn stock moving up instead of down -- sheesh.
"Northern Territory Chief Minister, Eva Lawler, said, “The Northern Territory is on the cusp of immense economic growth, and will be at the forefront of the nation’s transition to a net zero future".
“Today’s results released by Tamboran, who are also proponents of the Middle Arm Sustainable Development Precinct, paints a prosperous picture for the Territory as we strive towards a $40 billion economy by ensuring we capitalise on our world class energy resources".
“It is critical we continue to enable growth in this sector, because with growth comes a predicted 13,000 more opportunities for Territorians to work in new sectors, more reliable energy sources, lower emission production and lower power bills,” Ms Lawler said.
Northern Territory Minister for Mining, Mark Monaghan, said, “The Beetaloo Basin has globally significant Natural Gas reserves which will transform clean energy production in Australia".
“Sitting 500km south east of Darwin, are projects which will create multibillion dollar growth to our economy, and Tamboran’s 30-day flow test results is a key step in delivering on this vision".
“We will be the jurisdiction to deliver cheaper, more reliable and lower emissions gas to the rest of Australia for decades to come,” Mr Monaghan said.
RobRoy -- extremely disappointing and looking like it will get worse unless POQ and Joe Nally start promoting Falcon to some new buyers and big investment houses very soon??
The existing long term owners aren't buying any more shares no matter how cheap they are getting -- as we all know from the Investor Meets session -- that no sale is likely to happen for at least another year and most likely longer. Anyone looking at buying Falcon (you too Marshmill) is going to sit on the sidelines waiting for the bottom again -- as we now know that not even STELLAR flow rates will move this stock higher.
The only way this stock is moving higher will be with a new group of sophisticated brokerages/investment banks coming in for a seriously nice return on their investment. If there is not a concerted effort to promote Falcon to the big investment banks (that should be thrilled with a 500% return in 18 to 24 months) fairly soon -- then the share price will keep drifting lower. Any fund raise done at these levels would be severely dilutive as well -- which also indicates that the dog and pony shows should be in the works -- (hopefully soon LOL).
JamesL et al, When looking at the chart that POQ put up at the 8:20 mark of that Vancouver presentation in 2015 -- the estimated value per acre was $4009 if the exploration property was at the "Appraisal" level. That Appraisal level is only reached after a number of successful exploration wells have proven up the resource (which Falcon has done in the dark Blue core one million acre zone) and has "production" from horizontal wells.
This "production" stage has yet to be reached -- as that happens when we are finally selling gas into the Amadeus pipeline in 2026. Therefore, our next target is to reach that "Appraisal" stage by proving up the next two 3 km horizontals -- (which won't start drilling until a month or two after the 90 day SSH1 flow test is complete) and start selling gas into the Amadeus pipe as soon as we can.
To reach the much higher valuation of $18,000 per acre shown on the 2015 chart -- Falcon would have to be a full oil and gas company with 100's of wells already producing gas in that core dark blue area -- and thankfully POQ isn't looking at that scenario.
tnbird -- we could hopefully be looking at a larger valuation -- if a buyer wants all of Falcon'sw entire net 1.04 million acres -- which could move that sale to something closer to $1.5 Billion (maybe if we have a nice bidding war with more than one suitor)?
If we get to that "Appraisal" level by producing and selling gas from the Dark blue core area of one million acres -- then hopefully some of the major oil and gas companies will see the prospect of drilling one or two thousand wells in that Dark blue core area as being repeatable across that entire one million acres and pay up $900 million for Falcon's share of that Core area.
There is very little chance that any major oil and gas company would put that same $4,009 per acre valuation on Falcon's remaining 800,000 acres (out of Falcon's net total of 1.04 million acres in the Beetaloo) as there won't be any production coming from those shallower areas for many years to come. That would indicate that on that same valuation chart from 2015 -- that additional 800,000 acres could be assessed at the "Undeveloped" second stage (with some flow tests, seismic logs etc. but no producing wells). That chart shows a $844 value per acre -- which could potentially increase Falcon's selling price by another $640 million -- which might be a bit of a stretch but still possible??
Nice find Oleo,
If we look at that slide shown at the 8;20 mark (from POQ's 2015 Pan Pacific Hotel presentation in Vancouver) -- you will see under the third step heading of "Appraisal" that way back then shale gas acreage in the US was valued around $4009 per acre. I think that was also when nat gas was trading much higher in the US back in 2015, but those higher gas prices in 2015 are fairly comparable to the price points currently for nat gas in Australia.
Therefore, that valuation per acre may have some good correlations to what we might see for Beetaloo acreage values. However, that won't happen until we reach the next required level shown on stage three -- which is actual "production" of gas and not just flow testing -- with actual production scheduled for 2026.
If we look at JUST the one million acres in the Core deep blue area of the Beetaloo (after "production" is happening by 2026) -- and we give Falcon that same valuation of $4009 for Falcon's (22.5%) 225,000 acres share of that one million acres -- we would be looking at $900,000,000 US to Falcon's side of the ledger.
On a fun note. If that camera pointing at POQ was turned 180 degrees -- you would see my smiling face in the front row from that Keith Schieffer organized Oil and Gas seminar in Vancouver -- (where they served some nice white wine and appy's afterwards -- LOL).
This ausbiz link below will require an email for login, but that is all -- there are no fees required. This video interview with Riddle covers the news on the flow rates along with a fair bit of discussion on the re-listing of Tamboran in the US and how that will generate allot more attention on the Beetaloo as the first real shale gas development outside of North America. There is also some good points made about Beetaloo gas replacing coal fired plants in Asia and the East Coast of Australia, as well as Riddle's ridiculous LNG terminal in Darwin which he will only need around 5 billion to build.
https://ausbiz.com.au/media/this-is-the-moment-weve-been-waiting-over-10-years-for?videoId=34608
Eaglerbf -- I am assuming that your post is mainly directed at myself -- as I mentioned that the "news would spread like wildfire" in one of my posts after we got those stellar flow rates.
My apologies if you bought more shares based upon my post,, or if misled you in any way as that was not my intention!!
Up until Sunday I have repeated my old adage of "you can always always buy Falcon cheaper" dozens of times over the years, but on Monday I honestly couldn't believe that the punters would actually drive Falcon's share price down instead of going much higher. The fact that we have finally proved conclusively that the Beetaloo is a world class shale gas deposit with flows similar to the Marcellus -- should have given Falcon a solid move up in any kind of sane investing world.
I would highly recommend that you use the green "ON" button on the Filters Box at the top of this post -- and block out my posts completely -- like many other smart Falcon owners have done in the past.
Bloobird -- the most likely scenario for a Falcon sale (if it is for Falcon's entire 22.5% of the Beetaloo) would be a complete sale of Falcon Canada -- where the Falcon holding company is registered. This would then only have a single tax implication in Canada, but if Falcon Australia was the only entity sold then there would be Australian and Canadian taxes to pay, (so much more tax efficient to sell the Canadian holding company).
The Karoo assets (worth about 2 cents right now) could be spun off to a Newco with all Falcon shareholders getting a pro-rata share in the Newco at the time of dissolution. That spinoff would most likely depend on whether there was even a glimmer of a chance that the South African gov't can ever get the shale gas legislation passed -- (without handing all potential profits in the Karoo away completely to the local black 50% participation requirement that are planned)??
shalamar9 -- just in case WW is busy with real life -- (instead of Falcon's never ending story LOL) -- the answer to your question is YES -- we will get an IP 30 rate most likely on both wells, but for sure on one of them. The news on how those wells have performed with be a very big news event for both POQ and for Riddle -- so they won't miss that opportunity. One of the two is supposed to be put on a full year flow rate, but that doesn't preclude the news being released on the 30 day flow rate at all.
Hey Marsh -- I think you might be in luck as my old adage of "you can always always buy Falcon cheaper" appears to be back and in full force again.
I was positive after the news on Sunday that the adage was dead and gone, but now think that I might be dead and gone before my adage is -- LOL.
Here's one Camelot for Tamboran from Hannam & Partners showing a risked NAV of 64 aussie cents and an unrisked NAV of $4.11 aussie dollars (seems a pretty big stretch, but that includes the LNG terminal down the line I believe).
https://www.tamboran.com/wp-content/uploads/2024/02/Beetaloo-commerciality-proven-with-SS-1H-well_260224.pdf
Both Cavendish and Tennyson should have updated reports tomorrow after digesting the awesome news and POQ's Investor Meets session (along with the disappointing trading today I would assume).
Darn it -- but WillowGrove was right yesterday -- in that my old adage "you can always always buy Falcon cheaper" is back -- sheesh.
Falcon is trading done a 1/2 cent on the TSX, down in the US, and Tamboran is down in Aussieland. That is after this awesome news on flow rates and Marcellus comparisons that are finally showing us that all the Beetaloo hype is bang on after 14 years of waiting. -- (I am gob smacked, and the few I needed to sell for 40 cents Cdn doesn't look good -- LOL).
Derrick -- if you need to know if Mathys still holds his approximately 3% of Falcon -- just send an email in to POQ and I am sure you will get a reply if those holdings are still registered with the company.
Some of this selling on all four exchanges (Tamboran too) appears to be retail punters taking very tiny profits and moving on -- with maybe a view to buying back next year when there might be a better chance for an outright sale??
While POQ didn't give us any real clarity on when a sale might take place -- he did throw out some good hints!! If the next two 3 km horizontals are prolific (as the JV partners now fully expect) then an outright sale of Falcon's 22.5% interest could be in the cards by next year at this time or shortly after.
Any of the punters that are selling now for a few cents profit on their investment may not realize that this awesome flow rate news and very strong comparisons to the best of the Marcellus -- is going to spread like wildfire across America and then Asia and finally Japan.
The chances of a deep pockets company like EQT, Chesapeake, or Inpex (and many others) making a "snap" bid for all of Falcon's interest in the Beetaloo over the next while have NEVER been greater than they are now with this spectacular world class flow announcement!!! Any bid by one of these majors could easily be in the range of one billion dollars and that kind of offer would have to be taken to Falcon's BOD for serious consideration. Keep in mind that companies like EQT and Inpex have very deep pockets -- and that Inpex spent $35 billion in Darwin and now needs another 5 TCF of gas to expand in Darwin.