The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
I think you are most likely spot on dprussky. This well is so critical that it wouldn't be much of a surprise if Faron Thibadeaux and his very experienced Pioneer Resources team (including Tom Layman) were moving from one frack to the next much slower than they will be moving on future wells.
This very experienced team will be doing what Hardrock described as "engineered completions". This is where the team takes into account the geophysical rock data gathered during the drilling of the horizontal leg (and the data from each frack they do before moving to the next frack) to better space each of the fracks -- in order to obtain the longest lateral cracks in the quartz rock possible.
If we don't get any news when the Condor team leaves -- as that kind of news doesn't tell us anything about the potential of the Amungee H2 well -- we will have to rely on dprussky, and ITguy to post the Sentinel satellite shots with the size of the flare in another 10 days to two weeks time?? By that time -- Hardrock might be in a position (without betraying any confidences) to let us know how the fracking process went and maybe how many fracks were completed??
More bad news for the Russian sponsored greenies in Australia -- with this announcement from the Australian Climate and Energy Minister:
Climate Change and Energy Minister Chris Bowen has decisively ruled out accepting Greens demands to ban new fossil fuel projects under Labor’s cornerstone heavy emissions policy, declaring there is a vital need for additional gas in coming years.As coal-fired power stations leave the grid in coming years and the share of renewables sources shifts towards the government’s 82 per cent target by 2030, the remaining 18 per cent of power “will increasingly be focused on gas”, he said.
“Gas is a flexible fuel necessary for peaking and firming as we undertake this transformation,” Mr Bowen said in an address late on Monday to The Sydney Institute.
Mr. Bowen said calls by some activist groups and the Greens for an immediate ban on new gas, and demands that Australia cancel long-term supply contracts with foreign trading partners, “are both irresponsible and not countenanced by the government". "These are the same trading partners we will need to help drive the energy transformation – the sovereign risk created would be untenable.“
805slo -- I think the fracking crew from Condor would still be on site for another few days -- as the original Amungee H1 fracking took almost two weeks for 11 fracks, and hopefully Condor is doing twice that many which would take us to the end of this week. However, there may not be any press release until the Amungee H2 well cleans up and they have the first five or six days of flows to announce -- which could take us into early April, (but a short update that the fracking process went smoothly would be much appreciated).
Thanks kmj -- as this flow rate from Empire's 3H well is certainly a disappointing number, but the improved flow from their 2H well was very encouraging -- so definitely nerve wracking -- LOL.
I think that one of Empire's problems is the depth on the 3H well may not be deep enough to create the pressures needed to push the Velkerri B shale gas to the surface with enough force, but maybe Hardrock can comment as to whether that is part of the problem?? Alex Underwood did stress the deeper depths when moving to the Western Permits area -- so that may be indicative of the same issue??
Otd2000 -- I am fairly sure that even though the length of the Amungee H2 horizontal is only 200 meters longer than the H1 well -- that doing twice as many (24 fracks) will take close to double the almost two weeks that the Amungee H1 took for fracking. We might get an update when the Condor crew leaves, but it is also possible we won't get any news until the well is cleaned up and the initial six days of flow rates are announced -- which could be a month away??
Longknife --- if we don't get at least 3mm cu.ft/day from the Amungee H2 well -- I am fairly sure that Falcon will see a brand new low on the stock price. Anything under 3 mm will show that something has gone completely off the rails as far as all the data gathered -- alolng with the re-test on the Amungee H1 that indicated 5 mm if all eleven fracks were contributing.
This point in time is where I am the most nervous -- as this is where the expertise from the Pioneer team is supposed to help navigate the entire well completion process to get good results. However, as we have seen from the past with the Amungee 2H and Kyalla this is still a gamble -- as so far only one well in the entire Beetaloo (the recently "shut in" Empire Carpenteria C-2H well) has flowed at over 3 mm cu.ft./day for 8 days now!!
On a much more encouraging note -- that news from Empire on the improved flows from the C-2H one km long horizontal is great news. The Amungee 2H well should have a number of points that may improve those Empire results -- with a large casing diameter, a few more fracks most likely, a greater depth for more pressure to push that CORE gas to the surface, and a team with many 1000's of successful completions!!
Many thanks Hardrock, and I fully understand your comment about not betraying the trust of your friends. I know from past conversations -- that the crews working on the various well completions in the Beetaloo are under very strict confidentiality clauses -- so no worries about what you can or more accurately can't say.
Thanks for the Empire update -- and the link to the Q&A session with Alex. I have copied a link below that gives a bit more info on what shutting in and soaking a well can do to help (sometimes) the well performance.
https://onepetro.org/URTECONF/proceedings-abstract/15URTC/All-15URTC/URTEC-2154766-MS/151927
Hardrock, I know from your last post that you aren't currently up in the Beetaloo, but since you have your ear to the ground (probably literally at times -- LOL) -- just wondering if you have heard anything on how the Condor fracking is proceeding and whether you have heard of any problems??
It will be 18 days since we got the update on the fracking process getting underway tomorrow, and we won't be getting anything by way of initial flow rates for another 3 to weeks, but it would be worthwhile knowing if everything appears to be progressing normally or not?
Thanks for any insight or even rumours!!!
On the TSX we currently have approximately 1.2 million shares on the bid side from 13 cents through to 15 cents, and only 600,000 on the ask side from 15.5 cents through to 17.5 cents. This doubling on the bid side has usually been a good sign in the past -- as good news generally has those same bidders pushing the stock price much faster to the upside when the good news hits.
I am always surprised at bidders who won't pay an extra cent while they can right now, but who end up paying an extra 5 cents when the news comes out?? Seems to be an issue of false economy sitting with a bid that is one cent lower for weeks on end -- when your upside could be 50 -- 70 cents over the next year or so?? However, these comments are coming from someone who isn't even at break even after more than a dozen years -- so what the heck do I know -- LOL.
I was telling my son -- that I am probably more nervous (and not just a little worried) about the flow results coming our way in five or six weeks time. After so many years and so many disappointments with Origin's mismanagement at the helm -- that I have my fingers crossed this stellar team with Tamboran can make this well a commercial success.
This current well is so critical for just about everyone working in the Beetaloo -- as anything less than commercial results could be a very long term and very hard set-back for Falcon, Tamboran and probably Empire too. While we have another approximately $40 million that is still owed to Falcon for the ninth well on the original JV -- success with this one is more important than anything drilled in the Beetaloo to date.
In reading the resume's on all the talent that is working this Amungee H2 fracking -- I am more confident this current group of experts will get this one right -- which will kick start the Pilot production program, and extremely happy this isn't Origin running the show. But still very nervous -- LOL.
Thanks Hardrock.
Just wondering if you would have a sense as to whether this new team with Tamboran -- would have gotten a better feel for the Beetaloo's strike-slip & reverse tectonics from all the DFIT and log data that went into Tamboran's hands when the bought out Origin??
I am fairly sure that it was before you were invested in Falcon -- but could that same strike-slip & reverse tectonics have been some of the issues that Origin encountered when trying to get the mid-Kyalla well to flow, or was it primarily a water issue??
Faron Thibodeaux -- who is leading the very experienced team from Pioneer (including input from Tom Layman and many others) on the drilling of this Amungee H2 well, -- will be overseeing the entire fracking process. Faron has an incredible background of drilling 1000's of successful shale gas wells and appears to have both the expertise and long term experience to make sure each frack is placed in the best location.
From what I could find on reading up about the Marcellus fracking procedures -- I am fairly sure that Faron and his team won't just be doing an evenly spaced frack every 50 meters. The best way to get the longest lateral fracks appears to be with working with the rock geology itself -- to determine exactly where to set the actual locations for each frack.
The way I understood it, from reading up on successful Marcellus wells, -- is the fracks could be 60 or even 70 meters apart in some sections of the full 1300 meter long horizontal, and only 30 meters apart in other spots. The final location for each frack will depend on where Faron (and the team working this critical Amungee H2 well) see's that the rock geology will best lend itself to receiving the high pressure frack fluids to produce the longest lateral cracks -- which should hopefully release the greatest amount of gas.
Nice pick up of 5000 shares this morning scinceday1 -- but it would really help if you mortgaged your house and bought a few million hitting the ask all the way up to 25 cents -- LOL.
We may drift a tiny bit lower -- as any real news to drive us higher is weeks away, and there will be a few more daytraders getting nervous, but .15 cents is so close to the bottom -- that I think you will see five to seven times your investment over the next 24 months!! As always with Falcon -- the future looks bright -- it's the NOW that is hard to take :-)
Please ignore my last message -- I was never good at math -- LOL.
My numbers were way off on each well producing 93,000 cu ft. per day -- as somehow in my head I had interpreted that as 93,000 as 93 million cu ft per day. If these wells that Chesapeake sold are only producing 93,000 cu ft per day -- then everything I calculated (except the cost of drilling those 2300 wells) is way off. These 2300 wells have to be at or very near their end of production to be this low -- but WetWater might have some clarity on that.
Interesting Acquisition Origin789 -- as this sale price gives us some idea on pricing for natural gas producing assets in the US -- where gas prices are currently much lower than in Aussieland.
The production of 36,000 barrels of oil equivalent -- works out to approximately 216,000,000 cu ft of gas per day -- when using the industry conversion number below:
"equivalent barrels" of oil. One barrel of oil is generally deemed to have the same amount of energy content as 6,000 cubic feet of natural gas. So this quantity of natural gas 6,000 cubic feet -- is "equivalent" to one barrel of oil.
This acquisition of 2,300 wells producing approximately 216,000,000 cu.ft/day of gas per day must be in a fairly prolific area of the Eagle Ford shale in Texas. Each of these 2,300 wells would most likely be 3 mile long horizontals and would have to be producing approximately 93,000 cu.ft/day of gas in order to reach that total daily production of 36,000 barrels of oil equivalent.
I am not positive, but I would assume that most of these 2300 wells are stacked plays -- as the best we would see from 4 km (3mile) long horizontal in just the single zone Amungee B shale would be less than one third of that 93,000 cu.ft./day number. I have seen schematics of the Eagle Ford where they have up to four stacked plays on a single well -- so that might be what is getting this much higher production number for each of those 2300 wells. Fortunately for us -- the current price of natural gas in Aussieland is almost four times what it is in Texas -- so that will help on commercialization.
UK based INEOS only paid $1.4 billion for these 2300 wells -- which sounds like a pretty darn good purchase overall when looking at the daily production volumes and the fact that all the cost of drilling those 2300 wells was already paid for by Chesapeake Energy. These 2300 wells must have been producing for quite some time already before Chesapeake let them go at this ridiculously low price -- as the cost of drilling those wells was many times (almost seven) that $1.4 billion number -- if they got the well costs down to $5 million each.
The following clip is from the Tamboran discussion on HotCopper and was posted to HotCopper late last week:
"EEG advised -- "The C-2H EPT has been temporarily shut-in after a total period of 51 days. Over the first 30 days (“IP30”) of the EPT C-2H had an average gas production rate of 2.4 mmscf per day".
The C-2H well had a total of 21 fracks over a one kilometer distance -- with flow rates of 2.6 mm cu.ft/day normalized --which was a bit disappointing when we look at our Amungee H2 well only running the horizontal leg 250 meters longer than Empire's C-2H well. This Empire well appears to be a long way from what many consider the CORE area for the Beetaloo, and is at a much shallower depth (with 4.5 inch casing) which could be part of the reason for those lower flow rates??
Empire said that the C-3H was two km long on the horizontal leg and that they performed 40 fracks on that longer horizontal. I believe they are currently doing frack water clean up on the C-3H well, but does anyone know when we might hear actual flow rates on the C-3H that are hopefully more than double the C-2H well from Empire??
Otd2000, I am not sure what the casing at 5.5 inch would have cost, but Hardrock might have a general idea.
With the Condor fracking and everything else included -- the Amungee H2 is expected to come in just under the $40 million that was estimated for the first of the two remaining wells owed to Falcon under the original Origin nine well agreement. This leaves approximately another $40 million to be spent by Tamboran on our next well out of the approximately $80 million that Tamboran agreed to for the last two wells that Origin did not complete in the original JV.
If the Amungee H2 flows as expected -- I believe the second of the two wells that Tamboran committed to with Origin -- will be a 3 km horizontal at the step out location 10 km away?? It will make more sense, at that time, to spend more than $40 million and make that next well a bigger part of the Pilot production program, as well as proving up another area in the Beetaloo that is 10 km distant.
While 74 cents US sounds like it is a bit low for a final sell-out price -- as one dollar US would feel much better to me and everyone else I am sure (except those dreaming of $10 LOL). However, this would still represent a market cap for Falcon, (a Canadian registered company), that is over one billion Canuck bucks. This is not trifling amount -- especially when you take into account that any buyer of Falcon's interest for a billion Canuck bucks would most likely also have to make a minimum commitment to Brian Sheffield of at least another $1/2 billion over the next 3 to 5 years??
Otd2000 wrote: "I eagerly await the day for a resolution to falcon but not sure what I’d rather do".
After almost 14 years -- I am also eagerly awaiting for some sort of resolution to the Falcon saga. However, my son often gives me the gears -- calling Falcon my never ending 14 year "Soap Opera" and he wonders how I will keep myself entertained if the Falcon soap opera ever comes to an end -- LOL.
I am not sure what you guys are smoking -- but whatever it is I want some -- LOL.
Falcon may make it to the very first phase of the Pilot Production plan, but most likely only for the first two or three longer horizontals in the earliest part of the Pilot phase. Those 3 km horizontals are going to run around $40 million a pop, so Falcon's share for three of those will be another $25 million -- requiring another fairly large Falcon funding raise -- hopefully at 50 cents by then and not lower??
Beyond that first phase -- Brian Sheffield is going to need Joint Venture partners with much deeper pockets than Falcon will ever have -- when the partners have to start building the very expensive gas processing plant and gathering lines to bring the gas to that processing plant. Whoever partners with Sheffield at that point will have to commit possibly up to one half billion dollars in funding towards the next 100 wells -- just so Sheffield knows he has a partner with staying power. Those next 100 wells should come way down in cost -- but could easily still be in the 20 million dollar range per well -- for a total of 2 billion dollars.
Falcon's share of that kind of funding would be close to that 1/2 billion dollar range -- and to get there Falcon would have to put up another billion shares at around that 50 cent level -- and then you would have to wait possibly another 5 years to see if that bet paid off???
From my perspective -- I am hoping we see great results from this current well, and then move forward with the current JOA to get the next two horizontals done. If those next two wells are 3 km horizontals and produce around 15 to 18 mm cu.ft/day -- then I think there is a good chance that POQ will accept an offer from any number of major gas industry players (and Sheffield will be driving that deal forward). This offer could be to sell either just Falcon's 22.5 % of EP 98 for something like $500 million, but more realistically -- due to tax considerations -- to sell Falcon's 22.5% of all three permits for hopefully closer to $1 Cdn.
Great news today, and those Condor trucks managed to sneak past the Sentinel satellite during cloudy days -- LOL.
Just for some fun with numbers!! It took fifteen years to get the expertise on fracking just right in the Marcellus, but since 2021 -- new flow rates on successful CORE area 3 mile long (almost 4 km) horizontals in the Marcellus shale have come in at 24 mm SCFD to a high or 32 mm SCFD. Falcon's stock price could see a really nice bump -- if we see Amungee H2 flow rates coming in at anything close to 25% of these numbers (as the Amungee H2 horizontal length is only at 25% of the full length 3 mile long Marcellus horizontals).
Thanks Hardrock, When you hit the moisture index button on that Sentinel link -- you get an almost solid blue coloring -- so lots of rain in those clouds by the looks of that index anyway.
There is speculation that the fracking crew from Condor could be on site in 8 to 10 days. Therefore -- I was just wondering if you have heard anything along those lines?? and whether the Carpentaria Hwy and weather will cooperate for that many large pumping trucks to get on to the Amungee site???
Without any inkling of news coming our way any time soon -- a tiny sell of 500 shares ($75 at 15 cents) on the TSX (with only 1/10 of second remaining before the market closed for the weekend) knocked the market cap of Falcon down by $5 million -- LOL.