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.
Yep Camelot1 - Hindsight is definitely 20-20. Good call!
In the industry's opinion the money spent on the Kyalla was not wasted. That prize, which IMO holds much larger potential than the Amungee dry gas, has yet to be unlocked. Yes it was a bit of bad luck for Falcon with its limited carry/budget, but with all the positive indications yielded by the Kyalla horizontal prior to fracking I suspect when revisited the Kyalla will pay off in spades. As the oil industry teaches, even a dry hole contains valuable knowledge - it can tell you where not to drill or how not to complete in the future! The Kyalla is still being studied/analyzed to this day - so much potential there that Origin continues to 'waste' some of our 2022 drilling program funds trying to unlock the water issue.
Also you seem to be saying that POQ has misled its shareholders telling us there was no need to raise any future funding - that is a flat-out wrong statement if you go back and review what was said. POQ made it clear that if we are to go back in 2023 and drill a horizontal test on the Velkerri Flank that it would require additional funding to pay for Falcon's interest. Personally I was hoping this raise would be completed after the two horizontals with hopefully a declaration of commerciality but the opportunity presented itself to bring a world class shale explorer/expert into the fold and the opportunity was taken - I applaud Philip for capitalizing on this connection.
I haven't seen any comment on Falcon's news release concerning the Lamesa Holding shares. Looks like those share have been sanctioned in the US/Canada since 2018 - V V will receive no benefit from sale/dividends, etc. It appears these have been locked away indefinitely - all the stink in Australia was all about nothing. Falcon could have averted some of the negative press if POQ had released that information at the beginning of the Australian sanction news. I realize all the scuttle butt was being driven by the green people but this news kills any argument they might have. Victor has no board representation, has no benefit or say in anything Falcon, and certainly receives no benefit whatsoever from the Beetaloo.
UncleBuk: Just guessing but I would think it would be dependent on just where his stock is registered and is that a country where he is sanctioned. I know the US just sanctioned him - maybe Canada did also. Lots of unknowns here but I'm sure it will come out in time.
scinceday1: You might be guessing wrong. In past wells Origin has given some color to the indications incurred during the drilling of the horizontal leg. They will then likely give an initial flow test before following it up with the EFT to be completed sometime around year end. For cost and economy, Origin will drill both wells prior to going back and fracking the 2 wells. I'm pretty confident it won't be as long as next year before we have an idea of success or failure.
dprussky: Speaking of the Mako Trough and probable lack of potential value its worth a mention of the Karoo Basin in South America for some of those on this board that might not have the history. Technically Falcon's 7.6 million acres is the premium of the Karoo Basin. Great potential shale free of the dolerite igneous intrusions that play havic with long horizontals for fracking. Whoever put this piece of acreage together knew what they were doing. Shell has some adjoining acreage that is good but does not start to compare with what Falcon has.
With all that said - until the SA government rids itself of the corruption and current political system nothing is going to happen in that country. So much potential but with SA's current political climate the Karoo is dead in the water. No company/conglomarite is willing to invest billions in development to then give away huge portions of the revenue stream while at the same time risking the corrupt SA government coming in and siezing the operations.
Poods: As I said, you HAVE to report your ownership to the company - just because Philip reads something on a chat board doesn't mean he takes action on it. If you really want to be recognized for your reported 10 million shares, then give the company a call. Why you would even worry about this is beyond me.
Origin’s Russian gas links under scrutiny
Angela Macdonald-Smith
Senior resources writer
Feb 28, 2022 – 7.02pm
The Russian links of Origin Energy’s partner in its controversial Northern Territory gas exploration play have come under scrutiny after Russia’s invasion of Ukraine, triggering calls from interest groups for the exploration permits to be scrapped and for a ban on any government funding for the work.
The parent company of Origin’s junior partner in its Beetaloo Basin venture, Falcon Oil & Gas, is partly owned by Lamesa Group, a company controlled by an ally of Russia’s President Putin, Viktor Vekselberg.
Origin’s drilling in the remote Northern Territory is in partnership with a company partly owned by a Russian oligarch. Peter Eve
Mr Vekselberg was already subject to international sanctions over Russia’s invasion of Crimea in 2018.
The Australasian Centre for Corporate Responsibility noted that Mr Vekselberg’s representative, Maxim Mayorets, sits on the Falcon board.
It highlighted Falcon’s Russian links alongside those of Queensland Alumina Ltd, a joint venture between Rio Tinto and Russia’s Rusal International, which is partly owned by separate companies connected with Russian oligarch Oleg Deripaska and with Mr Vekselberg.
“Following Russia’s invasion of Ukraine, Australian companies, including Origin Energy and Rio Tinto, must immediately review their relationships with companies owned or part owned by oligarchs aligned with Russian President Vladimir Putin,” ACCR director Dan Gocher said.
Anti-corruption NGO Publish What You Pay also called for federal Resources Minister Keith Pitt to rule out any public money going to Falcon through the government’s Beetaloo grant programs – part of its gas-fired recovery strategy – and to consider revoking the exploration permits.
An Origin spokeswoman said the company would “continue to monitor the situation closely”, noting that the Origin/Falcon venture has not applied for or received any government funding for its Beetaloo activities.
Oleg Deripaska, billionaire and president of United Co. Rusal.
Russian oligarchs speak out against Putin’s invasion
“Origin will follow any rules dictated by the Australian government, and other governments as appropriate, with respect to sanctions,” she said.
“Origin is the majority owner and operator of the Beetaloo Joint Venture with significant operational control over any activities undertaken in the Beetaloo Basin. Origin is carrying 100 per cent of the costs for current exploration activities, with no funding being provided by its joint venture partner.”
The comments came as British oil major BP said it would exit its 19.75 per cent shareholding in Russian oil company Rosneft and take a “material” charge
Poods - I recall Philip explaining to me years ago that one has to officially report share ownership to he or Anne - then he is required to carry you on as a large shareholder if you exceed that threshold. You could probably call him and get a clarification on this - If you do call you might tell him you are 'checking for a friend' - Personally I wouldn't want to be on that list - likely carries some restrictions somewhere/somehow. You as an individual are not required to report your shares until you get over a certain percentage of ownership in the company (XX% ??) With Falcon's 1 billion shares you would likely be shielded from that requirement - 50 million shares might be a problem :^)
If you find out any further info regarding this please post - I would be curious to know the details or if I am even correct with what I posted.
I don't have any take on the Oilgarchy Sanctions - Will be interesting to see what takes place. IMO, if anything, I think these sanctions will force Origin to divest themselves of Falcon - how that comes about is yet to be seen. Will Falcon be sold to the highest bidder - What about the 2022 drilling program. Hmmmm!
Australian companies must urgently review ties with Russian oligarchs
28th February 2022
The Australasian Centre for Corporate Responsibility? (ACCR) is calling on Australian companies to immediately review their relationships with companies linked to the oligarchs aligned with Russian President Vladimir Putin.
Origin Energy (ASX:ORG) (77.5%) is in a joint venture with Falcon Oil & Gas Ltd (22.5%) in the Beetaloo Basin.
Russian oligarch Viktor Vekelsberg owns approximately 16% of Falcon Oil & Gas Ltd through subsidiary company Lamesa Group Holding SA.
Vekelsberg representative Maxim Mayorets sits on the board of Falcon Oil & Gas.
The Beetaloo Basin has been prioritised in the Federal government’s “gas-fired recovery”, including federal grants for exploration.
Queensland Alumina Ltd is a joint venture between Rio Tinto (ASX:RIO) (80%) and Rusal International PJSC (20%).
Russian oligarch Oleg Deripaska owns approximately 44.5% of En+ Group International PJSC which in turn owns 56.9% of Rusal International PJSC.
Russian oligarch Viktor Vekelsberg owns approximately 32.3% of Rusal International PJSC through subsidiary companies SUAL Partners Ltd (21.6%) and Zonoville Investments Ltd (10.7%).
Dan Gocher, Director of Climate & Environment at the Australasian Centre for Corporate Responsibility (ACCR) said:
“Following Russia’s invasion of Ukraine, Australian companies, including Origin Energy and Rio Tinto, must immediately review their relationships with companies owned or part owned by oligarchs aligned with Russian President Vladimir Putin.
“The world has spoken, and the strategy now is to isolate Russia completely. UK-listed petroleum giant BP has announced the sale of its stake in Russian oil company Rosneft, for example. Australian companies must fall in line with this strategy.
“Origin and Rio Tinto’s ongoing cooperation with oligarch-owned companies legitimises Putin’s regime.
“Furthermore, some of the profits from Australian alumina and oil and gas projects will end up in the hands of the people responsible for propping up Putin’s murderous regime.
“The federal government must also ensure that the Origin-Falcon joint venture has not or will not receive any government grants. Grants relating to the ‘gas-fired recovery’ are of particular concern.”
Background
Top five shareholders in Falcon Oil & Gas Ltd as at 25 February 2022:
Holder Common Stock Equivalent Held (actual) Percent of Common Shares Outstanding (%) Market Value (AU$M)
Lamesa Group Holding SA 157,083,634 16.00 28.2
Nicolas Mathys 40,000,000 4.07 7.2
Lupus Alpha Asset Management GmbH 4,882,500 0.50 0.9
Philip O’Quigley CEO & Executive Director 3,513,696 0.36 0.6
Capital Bank - GRAWE Gruppe AG 1,300,000 0.13 0.2
https://www.accr.org.au/news/australian-companies-must-urgently-review-ties-with-russian-oligarchs/
Newtofo: Origin has the right to negotiate farm-downs on the Beetaloo but not necessarily the right to farm-down Falcon's 22.5% interest. One might see a situation where Origin does a farm-down with say Inpex, Santos or Total for part or all of their Beetaloo acreage but then Falcon would still retain their 22.5% interest in that farm-down acreage. This would be a fantastic situation for Falcon as it would immediately benefit the Beetaloo by giving further credence by attracting serious players and of course that could result in a higher interest of other potential suitors to Falcon's acreage. If Falcon were to stay around long enough to see some of this acreage developed then of course their acreage value goes from $1000/acre to $4000 - $12000/acre at no cost to Falcon - In my opinion, we do not want Falcon to participate in any farm-down which is not required - Philip appears to have done us a huge favor by allowing Falcon the option to continue sit back in the cat-birds seat while our Beetaloo assets appreciate in value - he may be earning his stock options after all!
Marshmill: The 2H and 3H well's laterals were drilled longer than 600 and 660 meters. Santos/Tamboran drilled the 2H and 3H wells landing in the Middle Velkerri B shale for about 1000 meters each (their lateral length). For some unstated reason they only elected to frack 600 meters in one well and 660 meters in another - IMO about 40% of the rock formation in those laterals didn't appear worthy of spending the $$$ to frack. Furthermore, IMO, some of the remaining 60+% they did frack was probably less than 100-% ideal - possibly this was the reason for the lower normalized rate than we expected? Too early in the game to be saying but possibly EP161 might not be the sweet spot (core) of the Beetaloo. Where might that be??
Following is part of the press release for the 3H well.
“We are pleased to report that our latest well in EP 161, T3H, operated by our joint venture partner Santos
QNT Pty Ltd (“Santos”), was successfully drilled to a total measured depth of 4,857 metres, with the
horizontal section once again intersecting over 1,000 metres of Mid-Velkerri ‘B’ shale.
Oleo: Done Because....? Origin flowed the Amungee well for 57 days and then issued a declaration of discovery. My thoughts were that the flow rate likely stabilized to the extent that they could call the Amungee well a success and then claimed a discovery as required by the Northern Territory. Was I saying the well was completed and finished - certainly not as we have since seen by the continued work being done on the well. I'm not sure if this answers your 'Done Because......?" but that was the purpose of my comments on that Amungee's 57 day test.
Longknife: Does not mean the flow rate will drop off after 14 days. Usually an initial flow rate can be provided once the well sufficiently cleans itself up - I always think of 30 days for the initial but I'm sure that's not cut in stone - Oleo or someone with more experience can provide a better explanation. I do know that what is more important and meaningful is a 60 or 90 day rate - that number more to you and me but more importantly the 30, 60 , 90 day rates provide the engineers with valuable information on how to predict the decline curve for the well. Some companies wait even longer than 90 days to provide a more accurate decline factor for the well. The Amungee well was flow tested for 57 days before it was shut-in. Falcon/Origin probably saw the flow rate numbers holding steady for a period of time and called it done.
I wouldn't go to the bank with a 14 day rate and it looks like Santos will not either - they have announced they will continue to flow test the 2H and 3H wells for an extended period of time.
WillowGrove: 30 days is not the magic number. 30 days is considered an initial flow rate - what really is important is the 60 or 90 day rate - by then the engineers can get a better idea of how the well is going to hold up.
Schlemiel: Let's let the short term traders move on down the road - many will be back soon enough.
Looks like the Santos/Tamboran wells were mediocre at best - Can't say I'm not disappointed. I was hoping for something in the neighborhood of 10 - 12 mmcf/d with these wells being deeper. Instead it appears they got less which IMO is not what Mr. Sheffield or Mr Santos was expecting. I am not qualified to express any opinion worth repeating so we need to wait for the experts to weigh-in. I think we can safely say that Origin/Falcon were looking for a comingled rate of 10+mmcf/d - that would have gone a long way to proving up their acreage between the Amungee and these two Santos wells. At this point I think the biggest takeaway is that possibly this Santos/Tamboran play may not be in the 'core/prime' area of the Beetaloo - that's still to be seen. I would think the JV saw some writing on the wall when the logs showed only 60% of the lateral worthy of fracking. If one makes that assumption then its not a long jump to assume that possibly some of that remaining 60% might have been a little marginal - once again just a guess on my part - may be the reason for the lessor flowrate.
So right now I'm pretty happy sitting on my side of the fence. The good news is that this is all coming to head this year. If Origin can replicate the Amungee well with two 2000 meter wells flowing a comingled rate of +/- 16 - 20 mmcf/d then we are in great shape - just keep those fingers crossed!
Newtofo: At the annual meeting, after the drilling of the Amungee well, I asked POQ and Gabor why the Velkerri B was picked over the Velkerri C shale since both had the same basic characteristics and approximate thickness - it was originally thought the two shales were a toss-up over which to target (Dr Close?). The answer I got had something to do with intermediate rock structures in the C shale that weren't as conducive to fracking, therefore they targeted the B shale. Just a WAG but possibly Santos has run into a similar situation and elected not to spend the time or money to frack areas which likely wouldn't be productive or take a frack. If that is the case, I would think seismic might offer up some clues in the future - I missed that PE class so that assumption is a WAG! Could be a multitude of things - maybe Santos will offer an answer to your question in in a future report - good catch and thanks for bringing it to the board's attention.