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Thanks Wet, as I think that POQ has done a great job up until now -- but maybe it is time to let Joel Riddle take over -- LOL.
Falcon dropped from 20 cents CDN (after Sheffield bought in) as is now trading at 9.5 cents CDN -- at almost the same time as Tamboran went from 40 cents Aussie (after Sheffield bought in at 40 cents Aussie) to their recent low of 20 cents Aussie. So both companies dropped in half but today Tamboran is trading back up at 27 cents Aussie -- (after all of the recent promotional bits done by Riddle) -- while Falcon has continued to slide lower and lower on the TSX and LSE exchanges. On the TSX -- there are currently only a couple of 100 thousand on the bid side for Falcon down to 5.5 cents and almost a million on the ask up to 11.5 cents -- so it looks like lower lows coming for Falcon and higher highs for Tamboran. Let's hire Riddle -- or join in on his promotions as that might help this never ending disappointing stock -- sheesh.
Longknife --- Falcon changed operating directions back in 2011 -- when Bruner was kicked out and long before POQ came on as CEO. Falcon went from an exploration company (that Bruner was trying to massively dilute by selling 100's of millions of shares to a nepharious Chinese group for just pennies) to a land holding company that was all about letting other companies spent their money to prove up the resource.
POQ had no mandate but to do exactly what he did so well -- as he never "gave up" any of the resource but rather has negotiated deals with others to spend $380 million. If Falcon had of kept the resource all to itself -- then Falcon would have to have raised that $380 million -- and we would have around 5 billion shares outstanding by now with all of that dilution. Not something that I would have stuck around for -- but then again should not have stuck around at all anyway -- LOL.
Poods and Camelot,
While POQ's 600 thou a year salary may be a tad high given the size of Falcon with only a few employees -- it is worth remembering what POQ has negotiated on his and our behalf over the past ten years. After POQ brilliantly called Hess's bluff -- POQ got us out a five exploration well program and into a couple $100 million deal with Origin and Sasol for nine exploration wells. We still have two of those wells to complete to the tune of $80 million. Then -- when Origin was burning through cash at a ridiculous rate -- POQ negotiated another $120 million to prevent Falcon from having to do a massive dilution before the Amungee was retested so successfully last year. POQ has also negotiated the TOG groups 2% overriding royalty over to BS for $6 million, -- along with getting BS to buy almost $10 million in Falcon stock at 20 cents CDN. this past spring.
For only $600 thou a year -- POQ has negotiated a grand total of $380 million in Aussie dollars being spent on our behalf with OPM (other peoples money), leaving a nice cushion of just over $16 million US currently in Falcon's bank account. While POQ's salary of $600 thou a year may sound a bit high -- the negotiated deals have been worth almost 50 times that amount over the past ten years -- so POQ's salary would seem to have been a good deal for shareholders.
Longknife -- best laugh and so true when you wrote: "this is not financial advice. I am just a glutton for punishment when it comes to this stock"!
I don't know if we will get much lower than we are currently trading for the tax loss selling season about to start -- as we are so close to all time lows, but with this stock nothing would surprise me. Any doubling of the stock from here will require a couple of very positive outcomes. The first would be 5000 cf/d on flow rates -- with clear indications that the decline rate is very low. The second would be for Tamboran's stock to more than double -- as that will help drag Falcon along with it. The third thing that may help will be if POQ, Joe Nally, and Tom Layman are out there doing some investor presentations with big money players.
Poods, I am fairly sure there are no more large blocks of shares, like the Sweetpea bankruptcy, left to clear out.
That would seem to indicate that most of the selling is coming from weak hands that either don't have the patience to wait until early February for initial flow indications or have better investment options going forward. On the TSX (as well as the LSE) -- we are certainly at a dismal share price, but there are very few sellers and almost no buyers -- as we are back to the almost continuous WAITING for flows to juice this perennial and painful slow progress of a stock. The only real plus right now (as per my earlier post) -- is that we are in much better shape overall than we were with just Origin as our JV partner.
I am somewhat expecting that after the fracking is complete that POQ, Joe Nally, along with Tom Layman -- will start another and more aggressive road show -- for some of the investment banks in London along with the oil and gas players in Texas. Falcon will need to see the stock price very close to the 30 cent CDN level by next Fall in order to be in a better position for a private placement or a 100 million share offering. This kind of stock offering would give Falcon close to $40 million US in the bank -- and put the company in a very strong financial position for just about any level of a 22% contribution towards the Pilot Production program, with only about a 10% dilution.
Thanks Hardrock -- as it will be a momentous day when we finally get pictures of more than one rig working a Beetaloo well pad :-)
The update on the NT moving forward with water allocations for fracking is good news and fortunately that is with a Labour gov't in Darwin. The greens are starting to get frustrated, but they won't give up completely -- so our best outcome is still with success at the drill bit. Commercial flows will keep adding to the N.T. general population's belief in both news jobs and more prosperity -- and no amount of radical environmentalism will compete with those two!!
Just for fun on slow Sunday -- here are some interesting comparisons on Falcon's position in the Spring and now Falcon's new position with the JOA in the Fall. If anyone notices comparisons that I have missed -- add them in.
Falcon in the Spring of 2022:
-- only one JV partnership with Origin -- one of the slowest movers in the Beetaloo, and primarily a utility company;
-- waiting for Origin to indicate when they would finally start drilling again after almost five years with no rigs on site;
-- Falcon fully obligated to spend 22.5% of whatever excessive spending that Origin puts forward for Pilot Production;
-- JV with Origin - a company that has never come close to controlling wasteful spending in the Beetaloo & head office;
-- Falcon having almost zero input on drilling locations, nor options to elect to not participate in bad drilling locations;
-- Falcon stuck with a JV partner that is a go slow utility company with 100% control over all Beetaloo decisions;
-- Falcon's options for selling a portion or all of it's 1 million acres severely limited due to Origin's 100% control.
Now the good news -- all of the above has been switched around almost 180 degrees with the new JOA. There is now both input and controls added back in for Falcon, along with JOA partners that are back drilling with a very clear path to both commerciality and actual gas sales into the Carpenteria pipeline. Falcon has gained a high degree of optionality on when and where to participate after Tamboran completes the next two obligation wells, along with the expertise that comes with the new JOA partnership. Additionally -- bringing in H&P as the next drilling contractor should move the commercial flows much faster to that 2025 target.
Thanks Rich -- as the schematic on page 7 of the Laredo Petroleum link you posted clearly shows how those laterals are designed to drain more shale liquids than a wagon wheel design ever could. They also show more well pads (8 in total in the Laredo presentation) than ideally the NT would like to see if the Amungee only ends up with a two zone stacked play, but with those laterals going 3 km in each opposing direction off each of the 8 well pads -- would certainly drain a very large area.
Just a quick question -- when you look at the picture below -- from Seven Generations Energy's Montney shale gas drilling platform in NE British Columbia. They show four rigs working simultaneously from a single well pad and just wondering if you would have any idea if this kind of configuration may apply to the Beetaloo?? By the looks of this type of operation -- the Beetaloo may require fewer well pads in total, but not sure how the horizontals from four separate rigs would align to get the greatest gas flows from a single well pad??
https://www.cbc.ca/news/business/montney-natural-gas-challenges-1.3829007
Thanks RichGreenwood -- as my suggestion based on a wagon wheel pattern was more of a guess on how best to drain all the gas from across any large block. What you have much more knowledge and experience with is much appreciated -- as there are few on this board with actual on the ground real time knowledge -- so every clarification is more than welcome.
You mention: "If will depend on how far the fracks extend etc.". Once a well is fracked and the gas is flowing -- how do the operators determine how far the fracks actually extend?? -- as that would seem to be critically important for how close the next horizontal is located?? Thanks for your help, as it is much appreciated.
Iaminnow -- check page four on this general overview of Marcellus shale gas wells.
This article indicates that up to 8 wells can be drilled from a single pad depending on local regulations etc. I am not positive -- but if there are stacked plays (like the Beetaloo might have with the B and C shales) -- there may be the potential for even more than 8 from a single pad?? Each well is drilled out in what would look somewhat similar to a wagon wheel spoke arrangement in order to drain as much deep shale gas as possible from each well pad.
https://www3.epa.gov/npdes/pubs/hydrofracturing_faq.pdf
Thanks BtoB --- Hear is a Youtube link to the most recent one of those Share Cafe interviews with Riddle and Corporate Connects Richard Close -- who has the 500% upside valuation on Tambo in a year's time. An excellent interview and really significant update on H&P's massive rigs with the first one coming next year and three to four more projected in the following three years. These 2000 hp rigs are state of the art walking rigs that are 75% more powerful than any rigs currently in Australia and are exactly what is needed to drill 3 km long horizontals -- with faster times and hopefully much lower costs -- like Empire is accomplishing already.
https://www.youtube.com/watch?v=EsU8aiBgi5s
Guernica -- selling the Mako would be a nice bonus, but there were no takers and minimal interest about five years ago (could be longer) when Falcon had the Mako assets actually listed for sale. The current high price of gas in Europe may improve that perspective, but I would think that any of the bigger gas companies in Europe would already have approached POQ -- if there was any chance at all of getting that Mako gas out of the deep sloznok formation??
As mentioned before -- any time, or money, or energy, focused on the Mako is a waste of scarce resources. The majority of the shale gas in the Mako is trapped in the very deep Sloznok formation, and the Sloznok (while being almost 1000 feet thick in sections) will not frack with any real successful flows. The Velkerri B is a very brittle quartz formation where high pressure sand and water will cause long lateral fractures that allows the gas molecules to move into the horizontal well casing very successfully. By comparison the Sloznok (which has lots of gas molecules trapped) will not frack successfully -- as it is somewhat similar to the vast oil sands in Alberta -- that have to be dug up and heated to release the oil. The Sloznok is far too deep to ever be dug up or fracked -- so the focus has to stay on the Beetaloo -- with maybe some progress in the Karoo in a couple of years time -- if the SA gov't finally gets motivated and that is a very big IF.
Second well location thoughts.
With the first well at the existing Amungee site already started -- I think the determination on the second well location will be somewhat based on Iaminnow's comments below.
Just my uneducated well completion guess, but I think Tamboran and partners are going to be watching very closely the data gathered from the well logs as the horizontal is drilled out the full 1000 meters -- to better assess the gas shows and TOC indications. If that first well looks very prolific -- there is a chance that Tamboran and partners may not wait for the initial flow rates that should be evident in later January -- as the Silver City rig would then be left sitting idle until then.
If the partners are unsure of what they see from the well logs -- then they should wait for the flow testing to decide on the second location, but the least expensive option will be to put the Silver City rig back drilling on the existing pad within a couple of weeks -- rather than moving the rig 10 km and waiting a couple of months??
Just for interests sake -- here is link below that shows pictures of many of the Montney shale gas well pads along the BC and Alberta border. There are a couple of pictures that hopefully will show what future Beetaloo pads may look like -- with up to four rigs working continuously to drill up to a dozen or more stacked wells off of one single pad.
Some of these Montney pads are located in much more rugged terrain than what Tamboran and H&P will have to deal with once all weather roads are in place.
https://www.google.com/search?rlz=1C1CHZN_enCA931CA931&sxsrf=ALiCzsb8IfazwQhgZWAMsUpx-JwNPEAy5A:1668552826629&source=univ&tbm=isch&q=pictures+of+montenay+shale+gas+drilling+sites&fir=9cfOcKVFsFovqM%252CWpKvDJKsJ_xBzM%252C_%253BG5z1ryn3gtFEFM%252Clox0liDnmY5acM%252C_%253BfJD2tJEw24vBnM%252CWpKvDJKsJ_xBzM%252C_%253Bhsi4QZrGzCZpaM%252CCMXlI1_K1UxmYM%252C_%253BDZQj2xwFOlEJGM%252CvtfRSoDD_FQSCM%252C_%253BQnz-ErlSbKxokM%252Cq57leIVE0Vgb-M%252C_%253BiXLD45TePgbhSM%252CtQgfJJwo33jofM%252C_%253BRoCuE8iLO4UanM%252CR4MIY4JCJA7orM%252C_%253B2qdjmXMMjIhHuM%252CUgC3CdLnzHX6mM%252C_%253B0ia7g9l0IyaS9M%252Cv7rfl0ShhPqhdM%252C_&usg=AI4_-kQAscECITpA6NZYhg-RUSVbfTancw&sa=X&ved=2ahUKEwjYq5TUo7H7AhX_IDQIHdjbBU8QjJkEegQIDBAC&biw=1587&bih=841&dpr=1#imgrc=9cfOcKVFsFovqM
Some interesting comparisons on Texas drilling rig companies by size:
Top 10 Texas Drilling Rig Companies
(Nov. 26, 2019)
Drilling Rig Operators
Active Horizontal Rigs in Texas
Helmerich & Payne
117
Nabors Industries
42
Ensign Energy Services
33
Patterson-UTI Drilling Company
32
Precision Drilling Corporation
31
WW, I think you are correct -- as Riddle won't be able to stay quiet if the initial flow rates are good after the frack fluids have cleared. Timing wise this update could come by the end of January or early in February -- if we assume 30 days for the drilling and then another 30 days to mobilize all the pumping and sand trucks in advance of the 20 fracks to be completed maybe by the second half of January??
Like you -- I am feeling pretty good that we should see something very close to that 5 mmcf/d flow rate -- given all the expertise that is on the ground now -- with 1000's of successful shale gas well completions by this team (which now includes David Close, Alexander Cote, the key Origin team, along with BS's team, Tom Layman, plus all the data from others like Santos and Empire).
I have noticed that POQ is sticking to his 3 mmcf/d projections -- as he is rightly dampening down some of Riddles hyperbole -- to a level that still makes the Amungee zone economic. If all 20 fracks are done correctly -- without any casing deformations or geologic faults interfering with gas flows -- then anything less than 3 mmcf/d will be a set back for all three JOA partners. However, given the eight years of data accumulated on the Amungee B shale, and the dozen wells drilled into the Amungee zone to date -- I am betting (literally -- LOL) that the flow rates will be at least at POQ's critical threshold.
In the very old Hogan's Heros movie -- Donald Sutherland played a great character whose often repeated punch line was "NO MORE NEGATIVE WAVES" -- as he was tired of all the moaning a groaning from the troops.
I can certainly sympathize with everyone that is throwing out "negative waves" as this has been a long drawn out disappointment after disappointment of a stock. However, that is all backwards looking right now -- as we are back to drilling finally and with a better overall agreement than we ever had with Origin. Let's wait for where we are after the flow testing or if you have no faith any longer in Falcon (a very rational point of view given the circumstances) then sell and buy something else with more potential -- but enough with the "NEGATIVE WAVES" -- LOL.
On a separate note -- I still read Darnit's posts but I don't really give them much credit. Darnit sold off all his Falcon stock long ago, but likes to come back and kick the stock for some sort of revenge (totally understandable too) but if he doesn't add any value to the discourse soon -- he will be on my filters list as well.
Hey Wet -- BS can have all of my shares right now for 50 cents each -- which is only 10 cents higher than the high we hit in 2016 -- so a good deal for him and gets me back golfing in Palm Springs -- LOL.
I am not too surprised that Sheffield may not like the sole risk clause -- as that was the most brilliant piece of the new JOA that POQ negotiated. That clause that gives Falcon's the clear legal option of not participating in 6400 acre blocks if those particular blocks are too risky, too expensive, too remote for all season access, or just pisx poor geology -- and that clause is exactly what will save Falcon from Brian Sheffield's attempts to force Falcon into a corner by overspending on dubious 6400 acre blocks.
Without that new clause in the JOA -- then I think that BS could certainly have pushed Falcon into an untenable position, but with that clause in place -- I truly believe that Falcon is well protected. BS can short this stock all he wants -- and nothing would make me happier -- as this is an almost worthless PENNY stock trading a few days ago below a dime on the TSX. Shorting a stock that is this depressed would be great -- as Falcon has no debts and $16 million in the bank -- so any hard short position by BS would eventually have to covered at a much higher price point if the next flow rates are as expected. If the flow rates are dismal -- then a large short position could be effective, but that would also mean that BS's entire gamble on the Beelaloo may be gone as well.
The best way for BS to gain control of Falcon will be stepping in a gradually buying up every day trader or nervous Falcon share holder that wants out at 15 or 20 cents and higher -- and by the time that Sheffield controls 51% of this stock -- my shares will be in Brian's pocket at 50 cents CDN --YEA.
Thanks Hardrock for that interesting ShareCafe update on Tamboran below:
"ShareCafe just sent CorporateConnect report with a 12-month TBN target price of $1.1, a 520% increase".
I am finally starting to get a little more confidence that Falcon might get very nicely dragged along on this ride -- as all of Australia (and most of Texas) starts to pay much more attention to the Elephant's Toenail equation -- first mentioned by David Close.
Falcon and Tamboran now have some of the best shale gas extraction expertise anywhere on the planet with 5000 shale gas completions -- along with a much more aggressive timeline for actually getting Beetaloo gas to the markets,
To my way of looking at Tamboran and Falcon -- I am even more firmly on the side of Falcon (with more shares added today). Falcon seems to be in a better position overall now that POQ has firmly established better parameters around how and where Falcon wants to participate in future drilling depending of geology, drilling costs and the premium available at that time for gas sales.
Falcon has a fairly significant cash buffer, over the next year with $16 million US in the bank, and no real need for additional funds until Tamboran and Sheffield layout their exact timing for the next two 3 km horizontals at the 10 km step out well pad. Falcon will also have an additional $30 million carry on the next two wells in 23/24 before having to participate -- which should carry Falcon into 2024 with the $16 million in the bank. So from a financial stand point -- Falcon appears to have less stress over the next year to 18 months from dilution -- as compared to the amounts that Tamboran will have raise in the market.
I think that Falcon will primarily be riding on Tamboran's coattails if we see anything close to this 500% rise in Tamboran's share price -- as Riddle will be doing a great deal of promoting and pumping on Tamboran and the Beetaloo -- to grease the market for his next big dilution. I believe it is at that point that some of the more astute oil and gas investors will take a closer look at Falcon -- even though Falcon's has 16% less ownership than Tamboran of the 4.5 million acres under Falcon's three permits. It will become fairly obvious to major investors that Falcon's one million acres in the Beetaloo (with multiples of TCF of shale gas) has only one third of the ORRI on gas sales as what Tamboran has agreed to once production starts in late 2025. Falcon's new ability to pick and choose which 6400 acre blocks that it wants to participate in will also be recognized by astute oil and gas investors as a brilliant cost mitigation and selective participation factor that makes Falcon's shares a more attractive option for Beetaloo gas exposure.
We are all still going to be waiting for almost a half year -- to see if all this shale gas expertise comes together at the Amungee site - but I personally don't think that Falcon has even been in a better position than it is
The Origin sale to Brookfield Asset Management is most likely the main reason that Origin dumped their Beetaloo investment. Those talks with Brookfield have been going on for a number of months and Brookfield (a Canuck co.) is only interested in slow steady utility returns and is not an E&P company. The pending Brookfield deal most likely helped to push Origin into an outright sale rather than the Farm Down that was expected.
Great contacts Hardrock -- as they were bang on!!
Interesting comment at the end of the press release from Tamboran on the follow up second well -- which is hopefully started as soon as the first horizontal is complete. I believe there is still some negotiations on-going about the location for the second well The Origin commitment was for two wells right away off the current Amungee well pad -- which is what the NT and Falcon were expecting from Tamboran -- so anything less had better be a much better option??
"The drilling and fracture stimulation of the A2H well, the first of two wells, will be fully funded by Tamboran
as part of Stage 3 of the Farm-in Agreement with Falcon Oil and Gas Australia Limited. The location of the
second well, which we are aiming to drill after A2H, is currently being evaluated."