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FOG news release
31 March 2022 - Falcon Oil & Gas Ltd. (TSXV: FO, AIM: FOG) is pleased to announce that it has received a subscription from Sheffield Holdings LP (“Sheffield”) for a US$10 million private placement through the issue of 62,500,000 Common Shares (“the Placing Shares”) at a price of CAD$0.20 per share (“the Placing”). Following the placement Sheffield will hold a total of 90,443,607 Common Shares of Falcon, representing 8.66% of Falcon’s issued and outstanding Common Shares.
BB - agree wtih that. Having HP invest in Tamboran and move one of its newer rigs from the US is one of the biggest votes of confidence on the reservoirs that we have. The political risk is probably the most significant weight on share prices. Hopefully we get good intial flow test results later this month and the NT and federal governments get their acts together.
I bought in around 2006 and sold a few years later for a small profit. I started buying back in around 2013 and am averaging USD $0.14.
Newt - I am certain they will flow test the well as soon as they set the production tubing. When they flow test, will need to flare. Otherwise, they would be venting all of that gas to the atmosphere, which is not an okay practice. In the U.S., many of the larger public companies will not flow back a well until they are pipeline connected because they have anti-flaring policies.
On slide 11 in the March 22 investor deck (https://www.investi.com.au/api/announcements/tbn/5a346b5d-647.pdf), they state:
- Rig currently enroute to Australia from the US.
- Targeting spud at EP 98 location in mid-2023.
Dprussky - I believe the gas would still need to be flared until there is a pipeline to deliver the gas.
Appears someone may be building a position. There has been a nice uptick in volumes on the LSE over the last 8 trading sessions:
Date Open High Low Close* Adj Close** Volume
Mar 29, 2023 9.04 9.20 8.82 9.15 9.15 3,164,965
Mar 28, 2023 9.30 9.20 8.92 9.15 9.15 2,305,073
Mar 27, 2023 9.30 9.40 9.20 9.30 9.30 713,276
Mar 24, 2023 9.25 9.40 8.92 9.30 9.30 1,482,658
Mar 23, 2023 9.05 9.20 9.00 9.25 9.25 352,303
Mar 22, 2023 8.75 9.07 8.26 9.05 9.05 892,826
Mar 21, 2023 8.60 8.65 8.20 8.30 8.30 214,760
Mar 20, 2023 8.60 8.60 8.10 8.50 8.50 1,072,055
2 new directors elected to board.
https://investi.com.au/api/announcements/tbn/8e960ac4-2c5.pdf
This link is to a case study of soaking in the Marcellus. The paper was presented at the SPE/AAPG/SEG Unconventional Resources Technology Conference, San Antonio, Texas, USA, July 2015.
https://onepetro.org/URTECONF/proceedings-abstract/15URTC/All-15URTC/URTEC-2154766-MS/151927
KMJ - it is so early it is really hard to tell, but my hunch is that the rock is going to be better in the Tambo/FOG areas, and those areas are the only thing they have. As an example. the Permian Basin is comprised of the Midland Basin, the Central Basin Uplift, and the Delaware Basin. The Delaware Basin investments soared in value over the last 5 years. EEG is a little more scattered - it may very well end up that EEG is in the best spot, but I sort of doubt it. To state what I noted earlier, I do not want to be cashed out of what might be the best rock at a low price, and miss out on a runup in Tambo. I realize that I am paying a little more per acre, but if this works, this should become worth thousands per acre instead of $50-100. Good luck with EEG, but I am sitting on the sideline for now.
Bouggie - I take it strategic thinking is not one of yours?
KMJ - I had the same thoughts but opted to buy Tambo instead. I know that it is more exposure to the same rock, but we could end up with Tambo acquiring Falcon at a discount once the carry runs out.
I have not searched all of FOG's regulatory filings for this contract, but it is possible it is out there. Deals can be done differently of course, but it is common under joint operating agreements to give non-operators the right to propose subsequent wells in the contract area under the JOA. There have been a lot of lawsuits over this issue. here is a good article if you are interested. https://www.ottingerhebert.com/wp-content/uploads/Be-Careful-What-You-Ask-For-Subsequent-Operations-under-the-JOA.pdf
Some of the LNG facilities operating in the US produce 5mpta. one under construction is estimated to produce 10mpta.
see data here: https://policyintegrity.org/documents/GHG_emissions_of_LNG_export_facilities.pdf
here is a link to a map:
https://www.epa.gov/ghgreporting/ghgrp-emissions-location
TSX closed up almost 18% of slightly above average volume.
Not really anything new in here - https://www.tamboran.com/wp-content/uploads/2022/12/221202-MST-Access-Now-the-Biggest-Player-in-the-Beetaloo.pdf
Newt - it takes a little bit of time and patience. It is called spacing tests. There can be communication (drainage) from wells in the same formation that are drilled to close (or tight) together, and in some instances communication with reservoirs above or below (which we could possibly see, for instance, with laterals drilled in the different benches of the Velkerri, but it can be between different formations in some cases). In shale plays, after there are some exploration wells, and frac designs are optimized, then usually these spacing tests are done, before the producer sets up its corridors and starts mowing down the wells. Can't wait to start seeing Tamboran, Santos and Empire mowing down the Velkerri!!!
As far as how close wells from the same formations can be drilled, the modern practice is to start conservative and do spacing tests. They can determine whether the wells are communicating with on another. THis will be different for each zone in the area being drilled. I have most recently been involved in the Powder River Basin in Wyoming, which has a lot of variability. Operators may end up drilling up to 4 hz laterals within the same 640 acre governmental section (1 mile x 1 mile), so they end up with that design at about 1,000' (330 meters) apart. It will depend on how far the fracks extend etc.
Most of the multi wellpad designs I have seen have hz wells with laterals that orient in the same directions. I understand the direction of the hz laterals is based on the natural geological stress, which can result in better fracking. I am sure it depends on the rock and the region, but I do not recall seeing operators in the basins I Have worked in the U.S. doing what looks like a wagon wheel. For example, the laterals may be drilled in a north to south direction. I recall WIlliams drilling 32 laterals off of single wellpads in the Piceance Basin of Colorado. Check out the design aruond page 7 (entitled "Designed ot Maximize NPV") on the attached SEC filing by Laredo Petroleum of its wellpad designs in the Permian. GLTA!!