Member Info for smallfish9

The well failed because of Tamboran management? Or the geology sucks and produced the same result as the first well there. A faulted billion year old reservoir is not the place to test a shale play. I get the earning requirement and timeline of the deal forced the location.

That's the plausible explanation to me. Returning to Amungee is senseless.

What is the rationale to returning to the Amungee vicinity? Can't make sense of it.

Oh, I know the Kyalla is unconventional, just not a good target.

Re Hayfield, do you feel the wells could be successful on >200,000 acres of development? A safer bet than likely prolific gas wells in a $10 gas market? Successful enough to justify an additional oil pipeline?

Wetwater, I wouldn't get caught up chasing conventional or other shale targets. There are a lot of conventional attempts that find little other than water wet sands, the Kyalla is a distraction. Go ahead, collect the data, but the idea of perforating the Hayfield and sterilizing a wellbore downhole is not going to produce a world class play of scale that would justify new pipe, let alone LNG facilities.

Newtofo, you actually believe the CEO of a company that's trying to do what Tamboran is working toward would drill a well to screw Falcon over? Yes, the JV farm-in program left nothing other than Amungee as the place to do the first drill and complete the earning, if anything Falcon could have extended the farm-in obligation to drill elsewhere.

Has anyone actually released that gel was used? Seems speculative. That's not typical and would be a very questionable choice when other chemistries are available to assist with sand placement.

"Hmmm - Looks like they ran into completion issues with the well. I am confident after all the engineering studies on the 1H that the 1H well was a casing deformation - not a 'skin' issue as some want to jump to. I am sure Tamboran/Falcon have known about this problem since the first part of May when they started flowing the well back. To date they haven't come up with a solution so who knows when or if they get this hole straightened out. The geology is solid so what did they do differently between the 1H and the 2H?

I find it equally interesting that Tamboran has not issued a press release as of this morning. It really has me scratching my head that Falcon jumped out in front of Tamboran on this release. This makes we wonder if all is well with the JV - that just doesn't happen.

Another thought, things like this make the sole risk clause important. If they jump back into the Kyalla area, Falcon may want to cut their participation back on that well - particularly if we are not fully carried?

They will get this problem figured out in time - its just extended our payday farther out. Someone indicated this was a POQ problem - that is BS as Falcon was not in charge of the completion of the 2H. We need to lay the blame at the feet of Tamboran or Sheffield's lab which did the analysis. Tamboran is in a real pickle right now. Curious to see their news release when it comes out. They have the H&P rig on site they need to keep busy; they have another fully carried well for Falcon and then two approximate 50% carries on 2 more wells for Falcon. That sounds like serious dilution to me.

Lets see what the Q&A allows."

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The geology at Amungee IS NOT solid, it sucked last time for results and it sucks again. The shale matrix is excellent, but the area along the uplifted and structured section as it uplifts to the north and outcrops relatively near. You can't fracture and structure billion year old rock and not suffer deliverability. Awful location and says nothing about the basin potential.

I see speculation of another well on the same pad...too funny.

The problem is that a 3mmcf/1000m well is an abject failure in modern dry gas shale wells. A rate this low approaches the point where one must be concerned that the reservoir itself is unviable. At the shallow depths of Carpentaria this may be the case, but a rate this low at Amungee would be very concerning, regardless of apparent b/e or npv.

Doesn't look like a flare to me. While it's not likely, they may be using an incinerator.

Sorry, I think the plot has been lost. Falcon has been back seated three or four times in the Basin, let alone mako or south Africa.

This is my last comment, I believe whole heartedly that the Velkerri B/C will drive a century of value. I also believe Falcon is an inferior way to realize the value. The alternative is pretty obvious.

Happy investing.

The drilling of duplicate wells on the same pad drives me insane, unless you're set to build production volumes.

An appraisal strategy is a balance of cost, practicality and reserves. Too much cost, the problem is obvious. Impractical plans become too expensive. BUT, failure to establish reserves significant enough to justify a pipeline and thus enable the move from contingent resource to reserve would be terminal.

A new pad brings greater support for reserves over a larger area, never mind the silliness of drilling 2P/2C from one of the only pads in the Basin!

Two 1,000m wells, aka STO? Why the hell would you drill two vertical wellbore sections and yield a total of 2,000m of lateral (or more like 1,200m). The vertical component is where the drill cost comes from.

It's a kindergarten level exercise.

"No suitor is going to buy Falcon based on what tomorrow's or next year's commodity prices predict. The development of the Beetaloo is a decades long development. If you are in Falcon for what commodity prices offer today then you are in the wrong game - any buyer is going to be looking at much longer price trends."

A point to add to this thinking. There is forward upside to FO valuation in the short term, one only needs to look at what TBN paid Origin.

There is some question in my mind if a buyer outside TBN/Sheffield exists after gas production has commenced. If it does, it's passive party that is friendly to the TBN/Sheffield union and likely willing to pay promote to 'own' hydrocarbons directly. Think larger Asian importer. This may not be bad.

But FO better get its crap together and prepare development funding. The false comfort of the JV clauses allowing sole risk and retention of essentially reserveless land dictate that Falcon's realization of value will look pale to others in the Basin.

And JV relations are almost universally cruel to the underling.

"How could POQ say that the two wells would be drilled in Sept knowing now that the water bore holes haven't been drilled for one of them"

Drilling doesn't require the water bores to be licensed, hydraulic stimulation does.

To my eye, these kinds of numbers aren't generally Ogip, they include a recovery estimate. For reference TBN cites 31TCF recoverable pre-acquisition.

Certainly only a small portion of this gas gets produced, but it's still material globally due to feasible exposure to export facilities.

From GIP perspective I'd

Wetwater, you say:

"Smallfish: I don't believe you understand the consistency/extent of these table-top shale formations. These shale formation production potentials don't vary significantly from one location (pad) to adjacent areas. If these next two Amungee wells prove to be 'commercial' it is said they can help prove up the acreage between those two wells and the Tamboran wells some 30-40(?) km to the west - that is IF the Tamboran wells are commercial wells ."

I couldn't disagree with you more, the continuity and characteristics of this shale is essentially unique globally. I understand that fully and agree.

What I disagree on, is that any reserves auditor is not going to give you 2P reserves across incredible expanses, they need to be 'under development', even 3P needs to have 'development committed'. This means that not only is a 5 year plan in motion and defensibly funded, that you MUST have the means by which to get the gas to market. So, you have a very small hull of 2P around a proven location and another very small hull of 3P around a producer. Yes, this can get more aggressive, but not on an investible timeline from the perspective of FO stock.

Any reserves auditor that provided a report extending reserves between Amungee and T1/M1 following successful wells at all three pads would be out of business the day they released that reserves report.

This isn't opinion, its the reserves process.
https://www.spe.org/industry/docs/OGR_Mapping.pdf

Beetaloo,

Your thoughts are sensible but unrelated to the reserves procedure. The best wells on the planet will yield little without participation AND a contract to sell the gas on land outside the exclusion area. There are no fools.

Beetaloo, with a 6,400 acre block around any non-participation it will be difficult to accrue any reserves.
Contingent resource for sure, reserves no. The good news is that FO will realize some further reserves gain through the carry of the two additional wells at Amungee. Better yet, there may actually be some lending capacity that results from it.

However, my guess is that any reserves accrual through non-participation would be very lean until many Hz wells have been drilled and more generous reserves assignment is possible. So, some funds for participation at surely much lower cost is the way to float the FO boat.

I will say that the market will see some value in the minority share, but it will not approach a 'reserves valuation'. Look how kind its been to TBN!

Has POQ spoken of a reserves strategy? Last I heard he felt a technical team was not a requirement.

Oleo, indeed, the only remaining card to be played in the Basin is who builds the first big pipe. It will be exceedingly difficult for a sitting on your hands do nothing company to justify why they should come late to the party but be entitled to a share of pipeline capacity. They may be able to force their way in, but at awful expense.

My primary concern for FO, is, how will they access a pipeline?