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Thanks guys for your thoughts on the investor presentation. Contrary to some on this board everything seems to be on track with the Beetaloo. Seems we are waiting on Hot Rig modifications but with the all weather access, the 2022 drilling program is still in place. I’m still hoping for 5mmcf/d results. With those results I’m looking for USD 50 1st qtr 2023. I’m on the road but will add a few more shares next week - with the expected results being put out, the stock seems a huge buy right now.
For those not familiar with shale fields, the Amungee B formation should yield very similar results as our original discovery well - baring a down hole problem.
Found my chat button filter today - won’t miss that poster - all negative and nothing constructive to offer.
GLA
Sneaky: Short answer - No I have not talked to POQ in regards to my flow rate estimate. The original 1000 meter Amungee discovery well has a normalized flow rate of 5 MMcf/d. Therefore my estimate for a 2000 meter commercial well in close proximity would likely flow 7-10 mmcf/d.
I believe the 2-3 mmcf/d is a low threshold estimate for a commercial well with the current commodity pricing. These close proximity shale wells will likely have the same production characteristics as the original Amungee well. With the current 3D seismic being run the next wells will hopefully avoid the fault problems the original well encountered.
Hey Poods -Yes I had to chuckle to myself on the short squeeze comment! Good move in my opinion on the additional stock purchase and even though some on this board won’t agree, I continue to think Falcon is a great long term buy. IMO, if the next two test wells match the Amungee B 5 MMcf/day normalized rate, Falcon will be sitting sweet. I’m looking for 7-10 MMcf/d on 2000 meter horizontals. I’ve talked to Philip several times about the huge potential of participating in the Beetaloo longer term - looks like Falcon’s board is listening to its new board members.
I’m very pleased to hear about the 12(?) well pilot program - that project could put Falcon’s concession on the map.
I thought I heard on the call the mention of a strategic partner - maybe for the Velkerri Flank and possibly the Kaylla development along with large step outs of the Velkerri? I suspect Falcon/Origin will be focusing on the Amungee B member wells. My other suggestion to Falcon is to checkerboard any farmouts - let others take the risk leaving blocks of ‘infield’ drilling for future development.
I’m on the road and trying to type on an iPad which is a total pain! Just mainly wanted to let you know I agree with you on MOST things :^)
Sinceday1: That is the rate they need for commercial production on a 1000 meter well. IMO, based on the Amungee normalization rate, a 1000 meter test will likely be 5 MMscf/d and what are likely to be 2000 meter pilot program wells will be 7-10 MMscf/d wells. Falcon/Origin are playing it conservative just to not disappoint. With the commodity pricing of gas in the likely future, commerciality should not be a high bar.
Really glad to see this new board looking longer term. With the huge potential of the Beetaloo this stock is a great long term hold IMO.
Quick thought on the call:
Extremely choppy call on my end. With POQ accent, my bad hearing and the tech difficulties it was hard to catch a lot of the call. I was glad to hear they are beginning to look longer term to 2023/2024 pilot program. Sounds like they will leave the Velkerri Flank and the Kyalla to a new strategic partner (Origin's farmout?) and focus strictly on the Amungee B member wells/pilot program. If I heard right, the company is planning a 12 well pilot program for 23/24.
The smartest thing they could proceed IMO is to focus on the pilot program and checkerboard out some of the Velkerri Flank and Kyalla acreage to the 'strategic' partner. That's the approach many companies with huge acreage blocks use in the states - let other companies take the risk to prove up acreage leaving 'infield' drilling for Falcon/Origin to develop at a later date.
With the planned improvements to the Carpenteria Hwy and the proposed location of the pilot program, one can expect drilling/fracking to become a year-round activity - the wet season will not be that much of a factor. Thats how they drill 12 wells in two years for the pilot program.
The current commodity pricing is playing right into Falcon's hands and is giving a sense of urgency to move towards production and away from any further appraisal and exploration wells at this time.
From what I could hear it was a very positive call. I think the new board members are changing the way Origin/Falcon will operate going forward - a lot more long-term thinking - especially on Falcon's part.
Guys: Sorry for the confusion on the meeting time. I knew it was at 4:00 Dublin - just looked at my calendar and put my local time down. My Error.
Yes Jhealy - we are indeed a scattered bunch!
SneakySnake - Not missing in action - just sitting back watching things move at a snail's pace. I have accepted that Falcon has no say in the current timeline. We shareholders and Falcon are at the mercy of Origin Energy which is a larger utility company that doesn't move as fast as we would like on the E&P front.
Rest assured I am still as bullish as I ever was on Falcon's Beetaloo concession. I am trying to sit on my thumbs but still admit to buying additional shares from time to time. If I have something timely/appropriate to add to the conversation I will post but frankly as of late there hasn't been much of anything to discuss - at least nothing worthwhile I can add at this point.
I appreciate this board and believe it is well worth keeping up with - it's a great source of timely industry news and like all of us I have learned who to follow and who to ignore. We'll all gain our just reward - it's just a question of when!! GLA
Origin789 and all: Just trying to verify I have the correct information on this end. I have seen several post today that refer to the AGM meeting being 'tomorrow'. On my calendar I show it being held on Thursday July 14th at 10:00 Dublin time.
Don't want anyone who is wanting to tune in to miss out on the meeting.
As all of you, I am looking forward to POQ verifying the updated timeline for this 2022 drilling season. Ready to get this news rolling again.
Everyone take a deep breath and try to relax. Just as you, I am frustrated by the lack of apparent progress so far this year. Not only is there a lack of progress but also a lack of news from Falcon. With that said we must remember that Origin is still driving this train and we run on their schedule. Falcon (POQ) is reluctant to get out in front of Origin in any news release.
For all we know the seismic has been run and is being evaluated. We were told to look for drilling to begin in June - Origin is not yet late on that prediction. What is our CEO supposed to relate to the market that would be helpful - maybe things are still on schedule? Does that tell us anything we don't already know - to expect drilling to commence in June - is that a newsworthy event for a news release?
I would hope that Falcon would let us know if drilling was not going to commence this dry season - that would be a newsworthy release IMO and something Falcon could justify getting out in front of Origin - a delay may not be a newsworthy event for Origin but, IMO, would be for Falcon.
I think it is accepted knowledge that Origin's farm-down is in play - is that taking precedent at this time - I don't know. I suspect Philip is also frustrated with Origin's slow pace but that is what we get when a non-drilling company is running the show. Origin has saved our bacon over the years by being large and relatively stable and well respected company - now we have to learn to accept their lead.
GLA - These are trying times for many - me included!
Oleo: POQ has pushed this project from the start - In fact he chaired a group that tried to get the necessary political changes/regulations that would allow the project to move forward. From what I recall, the government wanted too big of a cut off the top to make the project viable. Also with the corrupt political system no company felt comfortable enough to invest huge amounts of money in the project that could easily be confiscated/nationalized by the government. As if that was not enough a company had to run their project with local help which made no sense.
There was a SA election two - three years ago - Falcon hoped it would change out leadership and improve the situation - instead the new group made things even worse. Maybe someday things will change but right now the majors are staying away from the Karoo Basin.
IMO we will hear/see something from our spy in the sky guy before we see anything come across the wire. On past wells the rig has been on site about a week before any announcement is made.
I'm guessing the Amungee well will be drilled before the newly planned 10lm step out. We know the coordinates of that Amungee site so keep your satellite eyes trained.
Newtofo says - " I am a little surprised that Origin is not looking at longer horizontals than the stated 1 km in length. My take would be the longer the better as the longer horizontals could add more volume to the Pilot Production scenario that is to follow in 2023 -- (IF THE FLOW RATES MEET THAT 2 TO 3 MM CU.FT/DAY THRESHOLD -- which looks pretty solid IMO). However, the separation of the two well pads by a 10 km length is indicating a more ambitious plan is in the works for 2023 -24 -- which will make Wetwater happy I do believe!!!"
Newtofo - Overall I am very pleased with the change in the 2022 drilling program. The step-out will offer an additional pad for future drilling - while a 10km step-out is not really proving up new acreage per say it gives Falcon/Origin the ability to prove how quickly and inexpensively wells can be drilled. I also suspect with the current 2d and soon to be utilized 3D seismic they will run into fewer issues on the horizontals. - IMO, the longer Falcon can participate in these appraisal wells the better the return for we investors. I understand some want Falcon to sell and wrap this project up but every additional year Falcon can continue to prove up acreage the better the final sell price. Though too early to know the new location, it would be nice see the new pad staked reasonably close to the Carpentaria highway - if so we might see more year round drilling with all weather roads.
Dropping back to 1000 meter horizontals is a very prudent step at this point. When we look back at the Amungee and two Tamborini wells - there have been three 1000 meter horizontal wells drilled - all three had issues and had to have normalized flow rates assigned. If we can't drill even one out of three successful 1000 meter wells then IMO we have no business trying to jump out and drill 2000+ meter wells possibly setting ourselves up for failure or problem wells, I suspect that dropping back to 1000 meter wells was likely Sheffield's and Layman's recommendation. With proper use of 2d and soon to be utilized 3d seismic the fault issues should be eliminated. With Layman and Sheffield's expertise in bringing in the proper completion people/procedures one would hope Falcon can drill two clean wells this year.
If Falcon sees what they hope (4-5mcf/d wells) out of a clean 1000 meter horizontal then we would likely graduate to 2000 meter class wells.
It goes without saying that Origin/Santos have screwed up their horizontal wells to date - as Cenkos commented - Origin pulled off a coup having Sheffield on the board and bringing in Layman's expertise. This newly revised 2022 drilling program will be a winner for all the Beetaloo.
CM Gunner had our back all through the moratorium and up to today - I would be surprised if he turned his back on the industry at this point - he understands the huge economic impact the Beetaloo holds not only for NWT but for Australia in general. I suspect the feds continue to have our back also. I saw in one of the Beetaloo reports recently that the 6000+ jobs benefit of developing the Beetaloo is still being talked up. Gunner has continued to stand up to the Green Party and I suspect that has not changed.
I would hope the 'red and green' regulations could be eased but that is not likely to happen at this early stage of the Beetaloo. Later during the production phase I can see where arguments could be made to remove some of the extreme regs we are currently under. One that comes to mind is the multiple well casing required for these wells - that is terribly expensive and from what was reported yielded no benefit and infact could create other problems. Justice Pepper had scientific experts stepping outside of their technical knowledge.
Newtofo - On an additional thought about shareholders expectations - With Nally being added to the board , Mayorets resignation and assuming that Sheffield helps bring another director to represent his ownership/expertise we shall see how the new board makeup directs the future of Falcon. In the past POQ has had the ear of the major stockholders/board members so they were pretty much of the same fold on what direction the company took. I don't think any of these board members are pushing for dividends at this point - Falcon could still be considered to be in an aggressive growth phase. I for one would like to forgo the dividends due to a unique tax structure that would make a dividend a taxable event where an outright sale not so much so. That's a 'personal problem' and I'll worry about that down the road if and when I have to face that issue. In the meantime I wait hopefully for good news from Tamboran followed up by an exciting initial flow rate from the Amungee wells. I also am hopeful that Falcon could somehow hang on to its interest long enough tor a second look at the Kyalla. Some on the board think that would be a waste of money but IMO with the Kyalla's huge potential it certainly worth another look if the water situation is not thought to be a newly discovered ocean!
Newtofo - I fully agree fully with the scenario you painted. There is so much damn acreage here that its going to take multiple companies decades to develop the Beetaloo. Lots of us think in terms of Falcon selling the Beetaloo in one simple transaction - that's certainly a possibility but selling specific permits or even parts of our permitted areas is also a possibility. If the geologist are correct and the Velkerri shale covers 95% of the Beetaloo then that will take multiple wells/years to prove up vast portions of even that formation's acreage - much less the Kyalla, etc. I wouldn't expect for dividends to be paid - as things get rolling with one or multiple companies then Falcon may or may not need proceeds to participate in any future appraisal wells. Like I say - to try to predict the future at this point is a fool's aaron. I'm just feel like we are entering an appreciation phase in Falcon's stock price - things are shaping up nicely even though the future of this project is not well defined. If these two Amungee horizontals yield the 10 - 15 mmcf/d each as I hope then prepare for liftoff!
Thanks for you participation on LSE - you serve as an anchor for this board.
Longknife - IMO, the immediate goal is to get the Velkerri Flank well drilled. The ultimate goal is to maximize the value of the Beetaloo whatever that entails - I don't know if Falcon has planned that far out!
On the 'next phase' I'm just saying that as Falcon's stock price increases there will be more opportunities to raise money and drill appraisal wells . POQ once told me his goal is to maximize shareholder value in Falcon. He said he would do whatever he could to realize the true value of the Beetaloo. Obviously the more acreage Falcon can prove up the better off the shareholder will be. That journey could be over next year or in 5 years - no crystal ball there.
I'd say if you get your $$ target and are ready to get out you sell - Falcon is not going to be in its current locked in price range forever. POQ also warned me if I was going to get the true value, not to sell until the gavel dropped - that's the true value of the acreage at that moment in time. The acreage value is currently .40 - .50 USD per share but here we sit at .15USD - crazy. With commerciality I personally hope for about $1.00 USD value but until the sale we likely won't see that in stock market value - not until we have some bidders.
Like you I've been in this stock much longer that I initially planned. My current expectations are that I'm out of this stock by the end of 2023 but then again it depends on what is in the pipeline with Falcon. I think I am safe to say we are at the point of seeing Falcon's stock price increase yearly - these stangnant 2-3 year periods are hopefully behind us.
Good Luck.
From the Irish Times article -
"Philip O’Quigley’s Falcon Oil & Gas should be riding the crest of a wave. The Irish company is jointly developing a one million-acre fracked gas prospect at the Beetaloo basin in Australia’s Northern Territories with Origin Energy, a large Australian company."
"The project, which has ridden out an environmental inquiry, has also posted promising drill results, and plays to the heart of one of the hottest economic debates on the planet, energy security."
Even the Times can't seem to get their mind around the 4.6 million joint project acres.
Nice article but behing a paywall :^(
Independent.ie article adresses the point of my previous post on the Sheffield placement -"The deal will leave Falcon with just over $18m on its balance sheet which it said leaves it in “a strong financial position well ahead of future decisions on the Beetaloo project”.
Falcon in $16m deal with Texas billionaire
Dublin-headquartered Falcon Oil & Gas has raised $10m (€9m) via a private placement of shares with Texas fracking billionaire Bryan Sheffield.
His firm, Sheffield Holdings, has taken 62.5 million common shares at a price of CAD$0.20 per share, leaving it with 8.66pc of Falcon’s ordinary shares.
The Dublin firm also agreed to grant Sheffield a 2pc overriding royalty interest over its Beetaloo basin permits – its key Australian asset - in return for a further payment of $6m. to be used to exercise a call option to reduce the royalty interest of another shareholder, the TOG Group.
The deal will leave Falcon with just over $18m on its balance sheet which it said leaves it in “a strong financial position well ahead of future decisions on the Beetaloo project”.
Falcon CEO Philip O’Quigley said Sheffield was “a highly successful investor and has made significant returns in the US unconventional energy sector.”
The Texan oil tycoon said the Beetaloo was emerging as “a world class shale gas basin” with similar properties to highly successful shale gas plays in the US. Sheffield founded Parsley Energy, an independent unconventional oil and gas producer in Texas that was subsequently acquired for over $7bn.
“Falcon is well positioned to become a key supplier of low carbon energy to Australia and to the world within a few short years. I am delighted to have this opportunity to acquire a significant interest in Falcon and gain exposure to their net 1 million acres,” he said.
Camelot1 - As you stated, initially it was Falcon's goal to take full advantage of Origin's 9 well drilling package and then put togethr a full appraisal/engineering study prior to monitizing its interest in the Beetaloo concession. Falcon knows with its limited recources and personal it is not realistic to think it can scale up operations into a production company - in that regard he is not changing his tune. IMO, he has come to realize the value to be added in every appraisal well Falcon can get drilled prior to dropping the gavel. IMO, the need to prove up more acreage was the driving force behind the Bryan Sheffield placement. Falcon had the funds to pay for any non-carried cost of the two horizontal wells - what it doesn't have is the ability to fund the drilling of what appears to be an exciting potential of the Velkerri flank well. Now with the Sheffield placement IMO it should be able to see itself through the completion of that test well and have sufficient funds to put together its sale package.
With this said I think its important to state that with each successful well drilled more doors of opportunity open for Falcon. As an example - with two commercially successful Amungee wells and a nice showing in the Velkerri Flank test - the price of Falcon should be substantially higher which lends itself to additional funding for future drilling exponetially increasing the appraisal value for sale.
The longer Falcon can financially participate in proving up additional acreage without substantial dillution of the stock the better off we shareholders will benefit from the sale. Under our new board leadership Falcon is in a good position to realize more potential from the Beetaloo. Falcon's original goals of selling prior to production has not changed - its just evolved into trying to mazimize value of the acreage prior to sale.