Member Info for Oleo

Thank you for the podcast link.
Since many years I was thinking that Fog got the sweet spot, the filet mignon of the Beetaloo Basin.
But when I watch Empire and Tamboran I get new thoughts and questions like:
- is Tamboran the lucky guy who got the filet mignon and not Fog
- do we have the rumpsteak part only
- does our operator in Australia know how to prepare a steak or will the operator fail to deliver a perfect steak (even if it is just a rump steak)
- what do you think: could it be a better idea to sell at least some Fog shares and buy Empire and Tamboran
instead of holding Fog?

Highest cash flow, except the oil companies that hedged or had to hedge at the wrong oil price

Pleasure
But sadly it does not help us to get Fog sold for one or couple of dollars per share :-(

Tnbird,

Before I repeat my old comment. Be careful with the oilfield units. 5 MM cft means 5 million cft.

IMHO the 5 MM cft per day calculation is not trustworthy!

First, physics is wrong.: You cannot say if we get 1 MM cft /d from 200 m, than we should get 5 MM cft/d from 1000 m in a horizontal well because friction loss, pressure drop etc. work against this simplification.

Second, geology is always full of heterogenity , that means if you have a certain geology, mineralogy, stratigraphy etc at 200 m, the other 800 m will never ever have the same geology, mineralogy, stratigraphy etc as the 200 m. And that means the reservoir parameters which deliver the production rate will be different for the 800 m. So second, the geology works against this simplification as well.

If you have 2 producing horizontal wells and you want to compare them, then it is possible to say well A got xx cft/d/m and the other well B got yy cft/d/m (here I mixed up oil field and SI units and m means meter). But you should not present calculations as Fog and Org.

I do not know if Fog does not know that, or if they know it and sold it to investors whose field of expertise is not reservoir engineering. And it becomes worse when a company as Org echoes this 5 MM cft/ d bull$hit.

JS,

perhaps you are right. In 2020 1 m3 gas was sold for 7 cent. Today you get about 1 € for 1 m3 gas in Europe.

But my favorit is still South Africa because it got the highest test rate for a vertical unstimulated well.

Unstimulated: means no acidizing, no hydraulc fracturing job

"shows. One of the wells, drilled in 1968, had an unstimulated flow rate of 1.84 million cubic feet of gas per day from fractures. 'The acquisition of the permit gives Falcon access to another potential unconventional energy basin and an additional option for Falcon's exploration portfolio,' stated Marc A. Bruner, CEO and President"

Unstimulated, vertical well in SA, and now compare to the vertical 0.364 million cub feet per day well in the Beetaloo from recently.

The Mako in Hungary is not very attractive. Deep=expensive wells are needed. The wells are hot and you get problems with the temperatur stability of the used chemicals for hydraulic fracturing. I discovered Fog, when Fog started to drill there in Hungary with Exxon and I was very curious about the results but shied away when the first news were published about this tight gas play, basin centered gas accumulation. I think the gas market in Central Europe is perfect and there was a fair chance because a company like Exxon farmed in but finally it was a duster and Exxon left.
But I always liked more the Karoo in South Africa and the Beetaloo in Australia. Currently we do not get the best results from Australia and I become not nervous but a little bit worried. A vertical well with an initial flow rate of 0,364 mmcft/d is a candidate for the Halliburton cement truck, for plug and abandonment. This well did definitely not hit any sweet spot in the Beetaloo. I would not exclude with 100% that a horizontal well (with how many frac stages?) could produce some gas there but the chances are much better to get a horizontal well with very good flow rates when the vertical well got already a good flow rate.
In the E&P business it is always good to have a contingency plan. Back in the old days the Karoo was the number one choice for Fog. But we had political troubles in SA, turned away from the Karoo and went to the Beetaloo in Australia. Perhaps the chance in the Beetaloo to produce hydrocarbon condensate attracted Fog as well, because gas fields with condensate earn much more money. So the Beetaloo was something like a more or less successful but ever lasting contingency for SA. With today's postmark I get worried because in the Beetaloo we have not seen any commercial flow rates which can create a share price of 30, 50 pence immediately. We have some more carried wells there but we need at least one well with commercial flow rates within the Fog concession or at least in the neighbourhood.
In the mean time the situation has changed in South Africa. There is not enough gas in SA, they have blackouts there and it is planned to shut down the old coal power generation stations. Mining , fertilizer etc companies and even Sasol are worried that they do not get enough gas in the future there. And I hope that Fog starts to reanimate the Karoo that we do not crash completly, in the case a commercial flow rate cannot be demonstrated in the Beetaloo. The world has changed when a South Korean steel company thinks that it is a good idea to buy an oil and gas company. And in such a world it should be possible to find a farm in partner for the Karoo as well to get the next steps financed in South Africa.

I am disappointed that we hear nothing from South Africa from POQ and Fog. The big boys are active in this area (see page 5) and there is a market (see page 13)
https://www.invictusenergy.com/wp-content/uploads/2021/09/61051419.pdf

And Posco plans to buy Senex, another small oil company in Australia
https://www.reuters.com/business/energy/south-koreas-posco-international-talks-buy-australias-senex-energy-2021-10-17/

A production rate of 0.364 mmcft/d is not enough. This low rate reminds me of the shale gas gold rush in Poland, more than 10 years ago. More than 50 concessions were bought by small, midsize and even big oil companies. None of the drilled, fractured wells was a gusher and shale gas is dead in Poland today. I hope the Beetaloo is no deja vu. We need a real commercial production test rate ASAP in down under.
The good part of the Carpentaria news, they want to drill 7 (!) wells, that means the high number of trials can increase the probability to hit a good production rate

No, in the Jan 2021 press release it is a drilling problem, not a production problem. Explanations for such problems can be a not consolidated formation, a too low mud weight or a bad shale inhibition.

... of no caused skin ...

Do you have a link for the Org press release?

"On 14 September, coil tubing operations recommenced at Kyalla 117. No apparent restriction or blockage was identified in the production casing."

- What happened to the restriction, blockage, that was offered as explanation for the poor performance of the well at the beginning?
- Did the operator run a caliber or better a caliber log with the CT to see if the casing is deformed or not? At least this section of the casing can be passed with a CT, that's the good news for today.
- Did the operator try to find out if the not anymore apparent restriction was just some frac sand or halite?
- Or was the interpretation of the restriction just wrong and the hold up from the effect of a dog leg was wrongly interpreted as diameter restriction of the casing?

The bad news, the issue with the water saturation (Sw) becomes more severe (my interpretation with limited data and info). Obviously the well does not produce enough gas and produces too much (reservoir???)-water , ending with a liquid loading problem, which kills the well finally. This finding is now proved two, three times at this well and today the excuse with the restriction as bottleneck does not work anymore. I cannot be 100% sure, but we get more hints that the Sw is too high in this reservoir for a commercial production at this location.
If this Sw interpretation is wrong, the operator should have kept the CT unit on location and should have lifted the well a second, third, seventh time to help the gas to remove the water block(?) from the spent frac fluid. Another point: I think we were told that the spent frac fluid did not damage the formation. Where are the proofs for this information of no causes skin in the well or was that just the 1:1 answer on the phone from the sales engineer of the service company that pumped the frac ?

Another hint that we got amateurs here "On 14 September, coil tubing operations...": you got a coil but it should be called coiled tubing and not coil tubing

Comparing the Beetaloo with the Jafurah.

Starting in 2024, SA estimates that $ 110 billion have to be invested for wells, frac stimulation, pipelines and facilities to produce the unconventional Jafurah in the neighborhood of the biggest oilfield on earth (Jafurah could use some infrastructure of Ghawar (?) and no Green party Lock the Gate)
The field's production is expected to reach 2.2 billion cubic feet per day by 2036 along with 425 million cubic feet per day of ethane and 550,000 barrels per day of natural gas liquids and condensates.
https://www.energyintel.com/0000017c-0d83-de48-a9fd-1fcf4b1c0000

Newto, not sure if this is the right email address?
investor@falconoilandgas.com

Lol, I have seen projects that took 30 years and more till commercial oil/gas production (managed by real oil companies), so should not complain too much

Hmm I am complaining that others do not have professional plans but on the other hand I send a letter with grammar problems - you understand what I mean.
Do you have POQ email address?
I am desperate because I see the technical problems derived from the power point presentations but do not see the mitigations

I am desperate enough to do that. But I would like to get some help with the wording from somebody with the mother tongue English because it should become a high quality letter or mail.
If I could get an email address, I would send you an appointment and an MS teams link?