The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
Thanks Thij -- as your link below with Riddle's comments on the recent legislation are what the politicians in both Darwin and Canberra need to clarify and hopefully soon.
Riddle clearly outlines that the Beetaloo gas will be Scope 1 and Scope 2 totally covered for any emissions and he details clearly that the Scope 3 emissions can be covered by the Federal gov't putting in Carbon Offsets (Riddle mentions a half dozen ways to do this in Thij's link below). This legislation needs to updated with something similar to what is done here in Canada with the end user being financially encouraged (or penalized in my case -- LOL) to reduce their carbon footprint, and the producers only being responsible for what they are actually creating when the gas flows under Scope 1. and Scope 2.
Riddle's comments on how to get to Scope 3:
Recommendation 9.8 of the Pepper Inquiry
The Pepper Inquiry recommendation specifies that one way to fulfill Recommendation 9.8 is for the Federal Government to "strengthen existing policies and/or the introduction of new policies and initiatives to meet Australia's international obligations."
Thanks kmjliveson -- as your post and thoughts on how everyone from Tamboran, Empire and even Origin on down has known about scope 3 since the Pepper Inquiry is accurate and worth a second reading.
Our problem now is the Green's are trying to force scope 3 onto the producing companies -- which is where Bandt is clearly correct -- in that it will kill the Beetaloo long before we get to production. Scope 3 -- is where the end users burn the gas (which is the majority of carbon emissions) and that is where the rest of the world puts the onus onto the end user to either not use gas or pay a Carbon Tax. This is what we do here in Canada -- and where I swear every month when I see the $35 plus added carbon tax on my gas bill for heating -- LOL.
If the various gov't's in LALA land don't come out and clearly state that companies like Tamboran will have to offset scope 1 and scope 2, but that scope 3 is now up to the end user to either switch to renewables or pay a Carbon Tax -- then the Beetaloo is going to get very few investors no matter how many millions of cu.ft. we get from the Amungee H2 two (which doesn't even have flaring yet??).
The Northern Territory needs the Beetaloo gas, tax revenue and jobs -- so the Labour Party's Resources Minister for the NT must hammer their respective Labour Party in Canberra and get an absolute and clear statement that the whole idea of Scope 3 carbon taxes is solely the responsibility of the end user. This is how the rest of the world is dealing with Scope 3 -- to effectively help nudge the end users to either switch to renewables or pay the Carbon tax, and where the rest of the world uses those added Carbon taxes to tackle emissions across all sectors to reach their climate action goals.
Alternatively --- if the idiots in Canberra can't find their rear ends (because they are looking at them from the inside) -- then the NT must come out with a clearer statement that the Beetaloo gas will be used for LNG trains with scope 1 and scope 2 being offset by the producers and scope 3 being the entire responsibility of the foreign buyers to deal with.
Villamaria --- I think the exporting of gas, particularly to the higher coal use asian countries, is the best option. Tell the rest of Australia to go green and freeze -- while the Beetaloo gas goes offshore without any scope 3 requirements -- except for whatever the receiving countries decide to put in place.
With two new coal fired plants being built every two weeks in China -- (plus many more every year in India and Indonesia) -- you would think that the Green Party would be pushing the Beetaloo forward under strict conditions that Beetaloo gas is going primarily to offset new coal fired plants.
For all the Green's never ending crap about stopping the Beetaloo -- none of their actions are going to change even a little bit of global warming without a switch away from coal fired plants. Stopping the Beetaloo won't make climate change in Australia even a tiny bit better, but sending the Beetaloo gas to these three countries to stop new coal fired plants would do more than all the crap the Greens have ever done!!!
https://energyandcleanair.org/publication/china-permits-two-new-coal-power-plants-per-week-in-2022/#:~:text=Of%20the%20projects%20permitted%20in,from%2040%20GW%20in%202021.
https://www.reuters.com/world/india/india-may-need-up-28-gw-new-coal-fired-plants-advisory-body-2022-09-12/
https://www.npr.org/2023/02/05/1152823939/despite-billions-to-get-off-coal-why-is-indonesia-still-building-new-coal-plants
https://www.abc.net.au/news/2023-03-01/nt-govt-denies-beetaloo-gas-plan-in-doubt-without-emissions-help/102035508
https://www.abc.net.au/news/2023-02-16/nt-csiro-under-fire-for-beetaloo-basin-offsets-report/101979988
https://www.afr.com/companies/energy/greens-changes-to-safeguard-won-t-stop-us-beetaloo-developers-say-20230327-p5cvlb
Pepper Inquiry notes on Stage 1, 2, and 3:
Thirty-five of those Pepper Inquiry recommendations are still yet to be implemented, including "9.8", which states that there be "no net increase in Australia's life cycle emissions from fracked gas produced in the territory".
Life cycle emissions include scope one, two and three.
Scope two emissions are indirect emissions from power generated to run a company's activities, while scope three result from the use of gas after it is sold.
https://www.abc.net.au/news/2023-03-28/have-safeguard-changes-put-the-beetaloo-basin-in-doubt/102144186
It is highly doubtful that the Greens will ever be able to push this weak kneed useless Labour gov't in Canberra to levy stage three against the gas producers. If they end up pushing stage 3 onto the gas companies -- the logistics and costs of offsetting the end users carbon footprint onto the gas companies would bankrupt companies like Tamboran and Santos (and effectively push gas prices on the East Coast so high that industry and consumers will get kicked back into the stone age).
In the interim -- the Beetaloo gas at only 4% carbon concentrations, which is some of the lowest carbon levels for any gas field in the world (most likely due to the origin of our Beetaloo gas being from billion year old green slime instead of from ancient forests which captured more carbon from the atmosphere) will be able to offset that 4% carbon quite a bit less expensively than most of the newer field gas producers.
This caving in to the Greens (by the useless political hacks in Canberra) will most likely hurt all of us financially. The Beetaloo gas will become less profitable to sell due to the added regulations and the increased level of carbon capture and carbon offsets that will be added to all the higher cost Pepper Inquiry regulations.
However, our biggest hit financially will most likely come from the increase in uncertainty about whether the Beetaloo gas will "NOW" ever get to market -- which will severely impact the upside from any excitement about the upcoming commercial flow rates as more nervous investors decide to risk their money elsewhere -- (which I am wishing that I did a dozen years ago -- sheesh).
These craven Labour Party jackasses will in effect keep the upside in check for all of us and create what the Greens are hoping for -- which is no one risking a bet on the future commercial success of the Beetaloo -- until consumers on the East Coast kill off the Green and Labour Parties politically when gas prices go three or five times higher!!!
From ABC news reporting (below) on this latest fiasco with the Labour Party caving in to the Green party in order to get voting support for other bills and amendments. Crazy and possibly our biggest risk going forward -- as most politicians are craven jackasses that care only about staying in power and will lie, cheat and ruin a country just to stay in or get power, and the public has no idea of just how hard life could get without gas from the Beetaloo until it is too late. Hopefully, these carbon offsets don't cost more that the gas is worth to pull from the Beetaloo, as this jackass Bandt is quoted in the Guardian Article as saying these offsets will cost the Beetaloo a $billion dollars a year -- effectively killing the entire Beetaloo project.
Mega projects into doubt.
The agreement has thrown two major gas projects in the Northern Territory into doubt, according to the Greens and environmentalists.
Gas companies have been wanting to open up hydraulic fracturing in the Beetaloo Basin while gas giant Santos has been seeking to open up the Barossa Gas Field, located off the coast of the NT.
The Nurrdalinji Native Title Aboriginal Corporation, which represents traditional owners of the Beetaloo Basin region, released a statement today expressing optimism the amendments to the Safeguards Mechanism Bill would make it harder for gas companies to get their projects approved.
"Our country is in the hands of these big gas companies and I feel very grateful that we may one day not have to fight to protect our land, sacred sites, culture and water," said the corporation's chair, Johnny Wilson.
"No one has seen the jobs and economic benefits which have long been promised by the fracking companies, and we do not believe they will ever come."
Mr Bowen said the agreement would require "scope one" emissions from the Beetaloo to be offset.
Scope one and two emissions are emissions that are directly controlled or owned by companies, while scope three emissions are emissions not directly controlled by a company.
Mr Bowen said new gas fields would be required to have "zero reservoir carbon" during development.
"That's a condition which is international best practice and has been Australian best practice for many years," Mr Bowen said.
Mr Bandt said the agreement had effectively "derailed" both projects by imposing a limit on carbon emissions that prevented new coal and gas projects from being approved.
The forecast for Daly Waters is looking good next week for a possible Sentinel satellite shot showing some flaring from the Amungee H2 site by next Thursday or Friday?? The current forecast (link below) -- shows clear and sunny for all of next week -- so hopefully dprussky, ITguy, or Hardrock will be able to post a link once flaring is underway. This won't tell us much of anything about actual flow rates, but will at least indicate that gas is coming back to the surface with the tons of frack fluid going into the evaporation ponds.
http://www.bom.gov.au/nt/forecasts/map7day.shtml
The real news on flow rates might not come until Tamboran has recovered most of the frack fluids, (possibly using Nitrogen lift again like Origin did with the first Amungee well as Hardrock noted), and the production tubing has been installed by SilverCity completion services. This could put the news on flow rates another six to even 8 weeks away, but I am personally hoping that the flows are so good that Riddle will be forced to issue an update in the next couple of weeks.
If this Amungee H2 is flowing with 5 mm cfd coming up with the frack fluids in two weeks time, and that 5 mm rate is steady over a number of consecutive days -- then it is highly doubtful that this kind of success can be kept secret for long?? The flaring will tell us a tiny bit about the level of success, but more importantly -- Mr. Riddle will want to get out ahead of any rumours -- if the confidence level is high with the entire Pioneer team -- that flow rates will only get better with the production tubing installed. This would give Tamboran's stock (and Falcon's too) a big lift on the initial flow rates and then another huge boost when the 30 day flow rate, (after tubing has been installed), is announced. All speculation on my part, but feeling very positive and nervous at the same time -- LOL.
Hey Wet, just a minor correction which I believe is correct.
Tamboran is obligated to a 7.1% ORRI to Origin -- as they agreed to pay a 5.5% royalty on all gas sold out of the three Beetaloo permits -- so paying that 5.5% extra on Falcon's 22.5% share of gas production bumps Tamboran up to the higher overall rate. On top of this Tamboran has agreed to a 2.3% ORRI to Brian Sheffield along with the existing 1% to Bayless group. When you add in the Northern Territory's 10% royalty on gas sales -- Tamboran has a total of 20.4% or royalties to pay out compared to Falcon's 13% in total royalties.
Correction to my earlier post on how high are the Tamboran ORRI commitments versus Falcon's ORRI commitments. I did some additional digging into the deal that Tamboran and Brian Sheffield negotiated with Origin and Tamboran has even higher ORRI commitments than I previously thought.
The deal that Tamboran and Sheffield signed with Origin was for 5.5% ORRI on the "TOTAL FIELD" production and not just on Tamboran's 77.5%. Falcon does not have to pay Origin anything at all by way of an ORRI on it's 22.5% of the Beetaloo.
Therefore, Tamboran has in effect granted Origin an even greater ORRI equal to almost 7.1% -- as they have to pay 5.5% royalty on Falcon's 22.5% share of the gas produced as well -- but where Falcon does not have any ORRI commitments to Origin. This increases Tamboran's ORRI by an extra 1.6% to a total of 7.1% ORRI to Origin alone!! When add that 7.1% to the 2.3% ORRI that Tamboran has granted to Sheffield and 1% to the Bayless Group -- Tamboran's total private ORRI's are up to 10.4% -- compared to only 3% in total ORRI's for Falcon.
Origin789 -- fortunately, this huge 5.5% royalty is strictly Tamboran's responsibility and does not impact Falcon's valuation metrics at all. Tamboran's total ORRI is just about 9% when you add in Tamboran's agreement with Sheffield.
Falcon by comparison still has a 1% ORRI to the TOG group and a 2% ORRI to Sheffield -- for a total of only 3% in added royalties, which will help the discussions when either a Texan, Japanese, or other Asian oil and gas giant comes sniffing??
JamesL -- the Amungee 4H & 5H wells are at the proposed step-out location which is also right beside the Carpentaria Hwy 10 km east of the current Amungee H1 & H2 pad. Origin got started on some of the civil engineering work for that pad towards the end of 2021, but there is still more civil engineering to go if Tamboran goes ahead with 4 & 5H wells in the next year??
Hey Wet -- exactly what I have marked on my calendar -- April 7th for Riddle to be crowing!!! I think you are right in that the initial flows will be a little lower and the higher flows coming with the production tubing a few weeks later.
Between now and then -- we might get a nice Sentinel satellite update from drprussky or ITguy as the weather is clearing over Daly waters in two days time. Anyone not familiar with this link below just needs to clik on the little black square for Daly Waters and the next seven days of weather is forecasted.
http://www.bom.gov.au/nt/forecasts/map7day.shtml
Hardrock -- I am hoping for "propellant" to rocket Falcon's stock upwards, but should have used proppant in my post -- LOL.
Your comments and thoughts would be most appreciated on how the timing for an update on flow rates could give us a better indication on how prolific this Amungee H2 well might be??? I am somewhat concerned that if we don't get an update in the next two weeks (like we did very early on in the Amungee H1 well as noted below) that the flow rates will most likely be at the lower end of the scale due to the necessity of the production tubing (and possibly soaking the well) to get a more acceptable flow rate???
Tamboran is currently indicating that we might not get any flow rate update until the H2 well has cleaned up and the production tubing fully in place -- somewhat similar to what Empire has done with their recent well (maybe without the soaking process added). This could put the update on actual flow rates up to six or seven weeks further down the line.
However, if the gas is being flared off -- after the plugs are drilled out and the frack water along with the gas starts to flow back to surface in the next few days -- what are the chances that we might get flow rates much sooner (like we did with POQ's flow rate update only 10 days after the Amungee H1 well started to clean up)???
Here is the exact Falcon update after ONLY 10 days from when flow back started at the Amungee H1 well:
"At Amungee a flow testing programme is still in the early stages - with only 10 of at least 30 days having now passed since flows began - and the well continues to recover fluids from the fracking programme.
Nevertheless, the well has been producing rates of between 0.8 and 1.2 million standard cubic feet of gas per day and early analysis indicates a dry gas composition containing less than 4% carbon dioxide.
The shale discovery itself is said to have a thickness of 30 metres. Porosity was said to be between 4.0% and 7.5%; gas saturation is measured between 50% to 75%, and permeability between 50 and 500 nano-Darcy.
Falcon highlighted that work to determine the discovery’s size is ongoing.
“That’s a lot of desktop study to go on with the next coming months,” O’Quigley said. “Then, we’ll head into the next phase of the drilling programme.”
The Australian
21 March 2023
Japanese LNG giants Inpex and Tokyo Gas
say Australian gas will be needed until at least
2050
By BEN PACKHAM
FOREIGN AFFAIRS AND DEFENCE CORRESPONDENT
Top Japanese gas companies have urged Australia to maintain its status as a
dependable energy supplier, saying the nation’s LNG will be needed in even
greater volumes until at least 2050 and will play a critical role in the country’s
clean-energy transition.
Japanese LNG giants Inpex and Tokyo Gas cautioned against policy shifts that
could undermine the nations’ vital energy partnership as the Albanese government
moves to tighter LNG export controls and the Greens mount a fresh push for a ban
on new gas and coal projects.
In exclusive interviews with The Australian, the companies said Japan would need
hundreds of billions of dollars worth of Australian LNG over the next three
decades, even as the country races to become the world’s first hydrogen-powered
economy.
Tokyo Gas chairman Michiaki Hirose said ensuring the “predictability” of the gas
market was crucial, and warned against “drastic actions in order to service the
consumer”.
He said Australia’s domestic gas price cap limiting east coast LNG prices to $12 a
gigajoule did not have a significant impact on the company.
But, as the Albanese government moves to strengthen its so-called “gas trigger”,
Mr Hirose said Tokyo Gas was opposed as a matter of principle to LNG market
interventions. He said the company believed governments should “rely on the
ingenuity of the private sector and trust the market mechanism”.
Inpex chairman Toshiaki Kitamura, whose company owns the $US45bn Ichthys
LNG project off Australia’s northwest coast, said our stable regulatory
environment was vital for energy investors, and “so as far as is possible, we hope
this stable situation continues into the future”.
Mr Kitamura said Australian LNG had become even more important to Japan since
Russia’s invasion of Ukraine. “As the international environment changes, there is
going to be a major shift towards ensuring a stable supply chain. So if you add this
factor, the investment environment of Australia is becoming more attractive.”
Thanks JamesL -- as this is looking good for both the number of fracks (25) and the 55% increase in the amount of propellant delivered to the fracks as compared to the Tanumburini wells. I am not entirely sure of the process -- but I think this large increase in the amount of sand injected should lead to the fracks staying open farther down the lateral cracks for ideally a higher flow rate
I think this news will lead to some Sentinel satellite postings from dprussky and ITguy sometime next week -- as they start the clearing process. If everything is progresses really well with the flow back of the fracking fluids -- we may not have to wait another six weeks for the first news on flow rates?? After the well is cleaned up and it is mostly just gas coming to the surface and flared off -- Tamboran won't be able to keep everything quiet for that long I don't think??
Remember -- that with the Amungee H1 well -- we got an update on flow rates around ten days after that well had cleaned up -- then we got a 30 day rate and finally a 67 day rate that was only marginally lower than the 30 day rate. If the Amungee H2 is flowing dry gas at a good clip -- after the frack fluid is almost entirely cleaned out -- then Tamboran might not want to wait for the production tubing before spreading the good news-- but that is just a guess at this point.
Stebol -- if they keep us waiting until the end of April -- Falcon could set new all time lows -- which will only make one person really happy -- as Bigones becomes a shareholder again for the fifth time -- LOL.
I don't think Riddle will be able to hold his tongue quite that long -- otherwise it will be up to dprussky and ITguy to post the Sentinel satellite shots showing the size of the flare -- and that might get the rumour mills churning??
chipndale -- more tumbleweeds that squeaky bum time!!!
This current drop in the share price and buyer malaise is fairly common with Falcon -- as any gaps is news for a month or more tend to have the day traders selling along with many of the long term holders getting nervous. There have been so many disappointments with Falcon over the years on drilling results, on gov't interventions, and with Covid shutdowns -- that no news for long periods of time causes a great deal on angst. This lack of news, combined with buyer malaise, and a massive float of a billion shares, can result in Falcon's share price sliding a small amount almost every day that no news is released -- usually on very small volumes.
The risk that anyone selling at these low levels faces -- is even a hint of the frack going well and flow rates looking good will have the share price ramping up on much higher volumes before the sellers can get back in at anything close to what they sold at. That is my theory anyway -- and I am sticking to it for at least another couple of weeks -- LOL.
805slo -- I am fairly sure that if the current Amungee H2 well flows successfully -- that we will get an announcement, (in about two to three months time), that the final well of the nine well Origin JV will be drilled at the step out location which is 10 km away. This step out location already has a fair amount of the site prep work completed, and there will most likely be further seismic work done in advance to confirm the exact depth and thickness of the A, B and C shales at that location.
I also don't believe that the next well will only be a one km long horizontal as that would be wasting time and money on such a short horizontal. I think that same announcement will include the mobilization of the H&P 2000 horsepower flex rig to the step out location -- to drill a 3 km long horizontal. This would then be the second well for actually selling gas under the Pilot Production program, and if the current Amungee H2 is very successful -- it makes no sense at all to drill only a one km long horizontal where a 3 km will triple the amount of gas for that Pilot production.
I am fairly sure that Falcon is in such a strong financial position that Falcon would not have to raise any additional funds either -- if the next well is a 3 km long horizontal. Currently -- Tamboran has to complete the last of the nine wells required under the original Origin JV -- with approximately $40 million Aussie dollars allocated to that final well. Even if that next 3km horizontal well runs to $60 million in Aussie dollars -- (due to the longer horizontal and the step out location requiring additional completion funds) -- Falcon's share of that additional $20 million is only around $5 million. Under the latest JOA negotiated by POQ -- Falcon not only has a large cash reserve in the bank (hopefully not the SVB bank -- LOL), but also has an additional $6 million in credit towards the next two wells to be drilled by the joint operation partners.