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As many of us now wait a little or a lot nervously, as we are maybe approaching a point in time where my 10 year old adage that "you can always always buy Falcon cheaper" is finally coming an end -- here is my personal lesson on when is the right time to buy Falcon?
I have been invested in Falcon for almost 14 years, but didn't have too many shares until POQ took over the reins a dozen years ago -- when Falcon was very wisely shifted to primarily a holding company. From that point onwards -- there was always the possibility that Falcon's minority interest in the Beetaloo could have been taken out at any time -- so I (like many others on this Board) have held on -- through many ups and many more downs!!!
Yesterday, (for myself )-- was the "right time to buy Falcon shares".
A few trades went through yesterday at 20 cents Cdn -- which is my break even price for Falcon. I could have waited 11 years and 364 days to buy Falcon shares and I would be in the same position I am today (and we don't even want to think about the lost opportunity costs for hanging in for 12 years!!).
Looking forward to reading a whole bunch of cheering posts to the Board on Monday -- with some awesome flow rates and the end of really cheap Falcon shares (hopefully -- LOL). GLA
Smallfish -- just a quick note of thanks for taking the time to post to the Falcon Board -- as i know your main focus is Tamboran and the HotCopper -- so your thoughts are appreciated.
While you are correct that Falcon will get somewhat abused on transportation, and processing (and most likely severely abused on the G&A that has been a especially proliferate with Tamboran the past couple of years). Fortunately POQ negotiated on off ramp that he might have to use if the spending gets out of hand.
POQ negotiated an opt in or opt out agreement on approximately 6400 acre blocks (some can be larger) whereby Falcon can take a pass on any blocks they don't want to be involved in and not have to contribute a dime towards the expenses on that particular block. However, Falcon would also miss out on any revenue derived from that block.
I am fairly sure that Falcon will fully participate in the next two full length horizontals -- as proving up 3 km horizontals will be very important for all three JV partners -- plus POQ negotiated an extra $6 million to Falcon's side of the equation on the next two wells -- when POQ agreed to the Origin switch to Tamboran.
Oilheadgame, there are a number of companies that could be interested in buying out Falcon's 22.5% interest in the three Beetaloo permits (with Falcon's share of those permits representing one million acres).
Inpex could be the first big LNG exporter that may well purchase Falcon, as just Falcon's interest the dark blue deepest portion of the Beetaloo (220,000 acres to Falcon out of the 1 million acre of the Core area) should net Inpex around 5 TCF
-- which is enough gas for Inpex to proceed with their third LNG train in Darwin. It is worth remembering Inpex's financial commitment of $35 billion to develop the offshore Browse Basin, with it's 12 TCF of gas, and build 2 LNG trains in Darwin. Paying Falcon around one billion for the potential recovery of 5 TCF in the Core dark blue area of the Beetaloo would NOT be a very big stretch for Inpex -- who has targeted 2030 for a third LNG train in Darwin, (but needs to find 5 TCF of gas first).
Then there are some of the big American natural gas companies, like EQT, Chesapeake, and others, (that are very familiar with Brian Sheffield and his father from their controlling interest in Paisley and Pioneer nat gas companies) that could be interested in a world class shale gas deposit in a market where nat gas sells for three times what it does in America.
Then there are very large energy companies in India, China, and other parts of Asia that need to move away from the 1000's of coal fired plants in Asia and on natural gas to reduce the high CO2 output issues with coal. Plus there are a number of sovereign wealth funds in Asia or the middle East that could be interested if the original Origin estimates of a total 86 TCF of recoverable gas that could eventually be recovered (20+ years) from the Beetaloo Basin's estimate of 496 TCF in situ.
Falconman -- this last part hit too close to home!! "We need an F-ing miracle. Before we all die of old age".
I thought we would see a little more upside with this soon to be released flow rate announcement -- than the Falcon stock has shown on any of the exchanges!! Maybe not too big of surprise given how many disappointments there have been -- going all the way back to the Moratorium.
That being said -- I think that the next two days are going to the last chance for really cheap Falcon shares. The flow rates coming late this Sunday in Europe and America are going to be stellar I "believe" (not saying hope this time -- LOL).
Everything on the SSH1 looks really good. The reports on high gas concentrations indicated after the E&P rig completed the horizontal, through to the flaring, and the awesome 300 feet of Verkerri B Shale thickness at the SSH1 site are finally indicating both commercial flows and the start of the Pilot production program getting underway this summer.
It has been mentioned already on this Board, but worth mentioning again -- that neither Riddle nor POQ would be planning on web meetings if the results of the SSH1 were anything less than commercial. We won't know for sure until late Sunday, but my guess is we are all going to see the end of cheap shares and see the F - ing miracle that Falconman (and the rest of us) have been waiting a very long time for -- before we die of old age -- LOL.
805slo -- that would be a great question to ask POQ -- if another Investor Meets gets scheduled after we get the 30 day IP rates??
I am not positive, but do believe that the longer term goal for Falcon is still to sell Falcon's 22.5% interest in all or parts of Falcon's three permits in the Beetaloo Basin. Falcon has never been moving towards being a full line shale gas production company, but rather has been looking to capitalize the asset at the best price possible. POQ knows that Falcon doesn't have the financial depth to be long term producer, and that any buyer will to have very deep pockets and a 20 year time horizon (like Inpex or companies associated with BS) to fully develop the Beetaloo's trillions of shale gas.
Ideally -- we will see significant interest in buying all or part of Falcon's 22.5% interest in the three permits sometime next year -- if the Pilot program gets underway later this year. When I mention "part" of Falcon's three permits -- that is because there is the possibility that any sale by Falcon could end up being sold to more than one separate buyer at different time horizons.
Since the Pilot production plan will initially be focused on the one million acres shown in the dark blue deepest areas for the Velkerri B shale -- there is the very real possibility that the first sale by Falcon could be for Falcon's 22.5% interest in that proven one million acres? If all of the estimates of potential shale gas recovery are correct, and that one million acres of the deepest Velkerri B has 20 TCF of recoverable gas over 20 years -- then someone like Inpex could buy Falcon's 22.5% interest in ONLY that one million acres. That kind of partial sale would net Inpex almost 5 TCF of gas -- which is enough shale gas for Inpex to commit to the construction of the 3rd LNG train that they have already told the NT government that they want to add to the existing two LNG trains in Darwin??
WW -- there might be a good reason for the new Liberty fracking crew to actually come in before the next two longer horizontals are drilled at the SSH1 well pad??
I wouldn't be surprised if the first Liberty fracking equipment and crew arrive later this summer!! If the next one or two full length horizontals are not ready for fracking by Liberty until the end of this year (at the earliest would be my guess) -- then they could get busy on two important fracking jobs long before the 3 km horizontals are ready for fracking.
The front end 500 meters of the SSH1 could be fracked at any time, if the IP 30 is good, and then the same Liberty fracking equipment and crew should be sent up to frack the one km Amungee H3 that has been drilled already by H&P. While I don't believe the Amungee H3 would be put into any kind of production for a few years -- (as no pipeline out will be constructed for a long time if the SSH1 site goes into Pilot mode), -- there is a very good case for completing that Amungee H3 well. H&P has already drilled and cased that well, plus a successful frack job would finally confirm the Amungee as a commercial zone. This could eventually lead to a higher overall reserve rate for this particular Falcon permit area, and put to rest the question whether the Amungee H1 "normalized rate" of 5mm a full one km was accurate or not??
Good question NorthernMagic, as the next two horizontals will most likely be drilled off the existing SSH1 well pad -- if the Pilot production plan moves forward this year!!
The Pilot production plan will most likely aim at two horizontals drilled by the end of this year, and would most likely be 3 km in length, with the objective of producing gas into the close by Amadeus pipeline by late 2025 -- (if the gas processing plant and 15 or so km of connecting pipelines are finished by then).
While the existing SSH1 is a full one km long horizontal -- it has only been fracked over the tail end 500 meters. Therefore, it seems to make good financial sense, (if the flow rates are seriously commercial) -- to frack the front end 500 meters and sell that added gas into the same Amadeus pipeline??
On a separate NOTE -- the following sentence was posted to the Tamboran HotCopper Board by "87 Crash" this morning, and seems to indicate that news from the SSH1 well pad is leaking and the news appears GOOD -- (hopefully -- LOL).
"IP15 has been tremendous. IMO therefore nothing to worry about for IP30".
Brian Sheffield's various investments in the Beetaloo are quite a staggering confirmation on what he thinks the Verkerri shale holds for the future. BS has such a strong belief in the Beetaloo that half of the following $230 million in US dollar investments are directly out of Brian Sheffield's own pocket -- which is a big boost in where we are headed I believe (and not hope -- LOL).
Just in case anyone hasn't followed all of Brian Sheffield's huge investments in the Beetaloo -- the following is a summary of where he is at with each of the following companies -- when you look at all the corporate filings to date.
Falcon: BS now owns 9.24% of all Falcon shares -- by purchasing 62 million shares originally for $10 million US, and has since purchased another 28 million shares in the open market for $4 million US. On top of this $14 million US -- BS paid another $6 million US out of his own pocket to purchase a 2% ORRI that was previously owned (by the TOG group I believe).
Empire: BS spent $5 million US out his own pocket to buy shares in Empire.
Tamboran: BS has spent over $50 million US of his own money buying shares directly in Tamboran over 6 times since November of 2021 and now owns 15% of Tamboran. BS also purchased a 2.3% ORRI from Tamboran for a further $15 million US.
Origin: BS paid Origin $21 million US in cash, out of his own pocket, to buy 38.5% of Falcon's 3 permits in the Beetaloo. On top of this purchase -- both BS and Tamboran have agreed to another 6% ORRI to be paid to Origin along with some commitments of gas deliveries to the East Coast at some point in the future. Just so everyone knows -- Falcon does not have any of the ORRI obligations to Origin -- nor any obligations of gas sales from Falcon 's 22.5% of the Beetaloo.
Formentera Australia: Brian Sheffield has raised (from other investors) another approximately $115 million US -- with those funds entirely focused on Sheffield's 38.5% share of Falcon's three Beetaloo permits. What is most significant about Formentera Australia -- is this amount almost fully covers Sheffield's share of the Pilot Production program -- which hasn't even been confirmed yet -- (an amazing show of confidence on what is coming this summer!!!).
Thanks ( I think) Otd2000 -- as I was hoping it was the C-3H flaring that you posted. A comparison to the C-3H (with 3.3 mm feet per day of flow over 2000 meters) might have warranted a bit more optimism for the eventual announcement at the end of this month.
However, I have gone back into dprussky's earlier posts, and found dprussky's Sentinel satellite shot of the C-3H well just after it was opened in early September of 2023 -- right after the C-3H had completed the six month soaking procedure.
If you compare the C-3H flaring from dprussky's post in September, 2023 on the first link below (with only one big black frack fluid tank) to the flaring shot that you (Otd2000) posted yesterday -- in the second link below (with two black frack fluid tanks) -- you will see why I was confused about which flare is which. In these two separate Sentinel satellite shots -- the flares appear to be very comparable -- and that may have stronger indicates that the SSH1 flare is maybe a very good one?? As Stebol said -- we will know for sure at the end of this month -- so I will stop yapping about satellites now -- LOL.
https://apps.sentinel-hub.com/eo-browser/?zoom=17&lat=-16.70011&lng=135.10121&themeId=DEFAULT-THEME&visualizationUrl=https%3A%2F%2Fservices.sentinel-hub.com%2Fogc%2Fwms%2Fbd86bcc0-f318-402b-a145-015f85b9427e&datasetId=S2L2A&fromTime=2023-08-06T00%3A00%3A00.000Z&toTime=2023-08-06T23%3A59%3A59.999Z&layerId=6-SWIR&demSource3D=%22MAPZEN%22
https://apps.sentinel-hub.com/eo-browser/?zoom=17&lat=-16.70087&lng=135.10231&themeId=DEFAULT-THEME&visualizationUrl=https%3A%2F%2Fservices.sentinel-hub.com%2Fogc%2Fwms%2Fbd86bcc0-f318-402b-a145-015f85b9427e&datasetId=S2L2A&fromTime=2023-03-29T00%3A00%3A00.000Z&toTime=2023-03-29T23%3A59%3A59.999Z&layerId=6-SWIR&demSource3D=%22MAPZEN%22
Kmj -- nothing visible on the True color button so that might just be the fact that without the filters the Satellite is just too high to pick up the flare heat signature (which isn't too big of a surprise I don't think).
On the False color button -- you can easily see the red dot in the exact same location as the Swir button shows the flare, but it doesn't show up nearly as bright without the Swir or Moisture filters added in. Not sure what you see at the bottom center.
If Otd2000 or dprussky end up reading my earlier post over the next few days -- if you could answer my question about whether it is the C-3H flare for Empire (and not the Empire C-2H well) that we are comparing to the SSH1 -- that would be most appreciated??
Kmj -- if you clik on the Sentinel link that Oleo posted this morning -- (and then zoom in as close as you can) -- the flare is that brighter orange circle the right middle of the well pad. That orange circle has a yellow center and appears to cover about 20% if the entire well pad, but that is primarily from the satellite making the heat signature appear a bit larger than it most likely is.
Just for fun -- clik on the moisture button on the left hand panel of the Sentinel satellite shot -- which is the button right above the Swir button. That moisture button makes the flare look like the entire well pad is on fire -- LOL.
Bloobird -- you are correct that flaring the gas is certainly a waste, but fortunately the total amount of gas that is burned off during flaring is a very tiny percentage of the Velkerri gas, and Tamboran will mostly likely shut that well in after 90 days of flow testing. I believe Tamboran is also looking to capture and transport the Pilot production gas into the Amadeus pipeline that runs up to Darwin -- with minimal flaring required.
WW -- keep this quiet (just so Stebol doesn't get too upset with any more posts about flaring -- LOL), but my main reason for my last post yesterday was to find out which of the Empire well flares was shown yesterday for the comparisons to the SSH1 flare??
My question was in reference to the vast difference in between Empire's C-2H and C-3H wells and which of those two wells is shown in the Empire flare that Otd2000 and dprussky posted yesterday?? The horizontal length of the Empire C-3H and the flow rates were significantly higher than Empires C-2H well.
Therefore, if the SSH1 flare is being compared to Empire's flare from the C-3H well ?? -- then the SSH1 flare is significantly more impressive than it would be if compared to Empire's C-2H well. Empire's C-3H well was almost 2,000 meters of horizontal fractured length versus only 500 meters for the SSH1 -- and flowed with an average 3.3 mm cu. ft. of gas per day over 30 days -- as noted from Empires press releases below.
"C-3H was drilled to a depth of 4460m measured depth (mMD), referencing the length of the wellbore, with a total horizontal section length of 2632m and a successful fracture stimulation of an impressive 1989m of the horizontal wellbore".
"Empire says C-3H flowed gas at an average rate of 3.3 million standard cubic feet per day – or 3.8 terajoules per day energy equivalent – in the first 30 days since it was brought back online on August 3. It says the rates are some 30 per cent greater than pre-soak rates achieved during this year’s first quarter".
Otd2000 -- just a quick question about the Empire flare you posted today from the much earlier Sentinel satellite shot.
Do you know (or anyone else) what the horizontal length and reported flow rates were by Empire at the time of this particular flare shown in this Sentinel satellite shot below??
The reason I am asking is I thought this Empire satellite shot that Otd2000 posted today was from one of Empires 1000 meter wells, but if this particular flare is from one of the longer horizontals drilled by Empire -- then the flare shown today from only 500 meters at the SSH1 well pad is significantly more important and may be closer to Otd2000's estimates of 3.6 mm (or greater) over a normalized 1000 meter horizontal (hopefully -- LOL).
https://apps.sentinel-hub.com/eo-browser/?zoom=17&lat=-16.70087&lng=135.10231&themeId=DEFAULT-THEME&visualizationUrl=https%3A%2F%2Fservices.sentinel-hub.com%2Fogc%2Fwms%2Fbd86bcc0-f318-402b-a145-015f85b9427e&datasetId=S2L2A&fromTime=2023-03-29T00%3A00%3A00.000Z&toTime=2023-03-29T23%3A59%3A59.999Z&layerId=6-SWIR&demSource3D=%22MAPZEN%22
The SSH1 flare might be on par with the Empire flare or possibly even a bit larger, but it is difficult to get both Satellite images "set" to exactly the same distance for an accurate comparison??
If anyone clicks on both the dprussky Sentinel link of the SSH1 satellite shot and in a separate link -- click on the Empire Sentinel shot that Otd2000 posted below -- (and then zoom in on both of the Sentinel views as tight as possible) -- you will see that the Empire well pad fills up more of your screen than the SSH1 well pad, even though the SSH1 well pad is slightly larger overall.
This zoom in comparison shows the Empire flare as larger, but that just might be due to the closer view of the Empire well pad from the Sentinel satellite??
Which ever it is -- this looks like a stronger flare than anything to date, and a good reason to have an extra ounce or two of scotch on the weekend. February is going to be a much longer month than normal -- even taking into account a leap year -- LOL.
Longknife -- I think that analyst for Empire is a little over exuberant, as the Cavendish and Tennyson analysts covering Falcon are a little more reserved in their estimates for Falcon.
If the current flare for the SSH1 is half the size of Empire's flares -- then that is quite concerning for any higher valuation metrics for Falcon. However, if the flows come in closer to 2.0 mm or higher over that 500 meter horizontal, and if the Pilot plans move forward this year, -- then we might see the Cavendish and Tennyson estimates moved higher??
Hardrock -- just a quick question on how you arrived at this statement below that the flare heat spot was half the diameter of Empire's flare??
"The flare heat spot diameter is ~1/2 of Empire's/Santos'; I hope it will improve and meet the 1.5 MMSCF target".
The reason for asking is the flare on January 28th was only visible through what the moisture index showed was a fairly saturated cloud cover from the Sentinel satellite shot?? Just wondering if you were able to gauge that flare as being 1/2 of Empires from that somewhat obscured satellite shot on January 28th or whether you might have determined this from other sources??
Thanks for any clarity on this, and for adding your well respected expertise to the Board.
https://apps.sentinel-hub.com/eo-browser/?zoom=17&lat=-16.84089&lng=133.65215&themeId=DEFAULT-THEME&visualizationUrl=https%3A%2F%2Fservices.sentinel-hub.com%2Fogc%2Fwms%2F42924c6c-257a-4d04-9b8e-36387513a99c&datasetId=S2L1C&fromTime=2024-01-28T00%3A00%3A00.000Z&toTime=2024-01-28T23%3A59%3A59.999Z&layerId=5-MOISTURE-INDEX1&demSource3D=%22MAPZEN%22
Northern -- if the SSH1 performs with very clear commercial flow indications -- no one will hear anything further on the Amungee H2 so-called skin issue (most likely forever). There is even an Amungee H3 that the H&P rig drilled in record time -- that might sit capped for a number of years!!!
The entire focus for the next few years will move to a fairly aggressive SSH1 area Pilot Program -- as detailed in the 300 plus page EMP submitted to the NT in December -- (which is very worthwhile reading through when anyone has a couple of hours to spare).
Follow up 2018 article for comparison on how Falcon could eventually get closer to a billion dollar valuation.
The link below shows a similarity to what my earlier post referenced in regard to Falcon getting closer to a $1 price point and a one billion dollar valuation.
In this article below it talks about our old Falcon partner -- Hess (along two other companies) were selling 210,000 producing acres the Utica shale to Ascent Resources for $1.5 billion. This $1/2 billion higher selling valuation would be due to the greater percentage of actual producing wells than what Falcon could be looking at after the few wells in the Pilot production program are up and running.
However, Falcon should be looking at a slightly higher profitability profile due to the much higher price points for nat gas in Australia -- even after taking into account the higher costs for operating in the remote Beetaloo Basin. Here is just a quote from this article -- with a link below to the full article.
"Oklahoma City-based Ascent Resources has 210,000 acres, all in Ohio, in what Yankowsky describes as “one of the best positions in the Utica.” The company announced in June that it had entered into definitive agreements to acquire certain natural gas and oil properties from Hess Corporation, CNX Resources, Utica Minerals Development, and a fourth undisclosed seller for a combined price of $1.5 billion".
https://www.aogr.com/magazine/editors-choice/efficiency-gains-help-independents-find-success-in-marcellus-utica-shales
Thanks Thij for the newest flare shot from the Sentinel satellite flyover.
This flare looks very significant -- especially if you zoom in on the Sentinel link and then click on the Moisture button above the SWIR button on the left hand panel. On the Moisture button -- the flare shows up as red and yellow pixelated squares through what appears to be a water saturated and fairly dense cloud cover -- which seems to indicate a very strong flare.
Hopefully (that word is getting stuck in my posts -- LOL) -- we get a announcement soon that the 30 day flow test has started -- and we can all get back to ONLY positive postings on this great and very helpful Falcon Board.
https://apps.sentinel-hub.com/eo-browser/?zoom=18&lat=-16.84177&lng=133.65243&themeId=DEFAULT-THEME&visualizationUrl=https%3A%2F%2Fservices.sentinel-hub.com%2Fogc%2Fwms%2F42924c6c-257a-4d04-9b8e-36387513a99c&datasetId=S2L1C&fromTime=2024-01-28T00%3A00%3A00.000Z&toTime=2024-01-28T23%3A59%3A59.999Z&layerId=5-MOISTURE-INDEX1&demSource3D=%22MAPZEN%22