Chipdale: Basically, you are correct. The surface boundaries of the permit extend down through the formations to be drilled. Interestingly, here in the states there can be arrangements where a company leases a drill site on a neighbor's property so that when the well is drilled the bit lands in the target formation close to the permit boundry line. I say close because there are restrictions as to how close a company can produce oil/gas to their boundry line. This prevents a company from drilling right on the boundry and producing the neighbor's oil/gas. Likewise, if a company is drilling towards a boundry line then the well bore is stopped when it approaches the boundry - you can't drill right up to the edge of your property and produce the neighbor's oil. This is probably more than you care to know but it's all about maximizing recovery while protecting adjoining acreage's reserves.
Even if you are not dealing with permit boundaries, spacing between wells is extremely important. Too close and you can frack into one of your other well bores or unnecessarily bleed off pressures from an adjoining well bore reducing the amount of oil/gas recovered from a lateral. If your spacing gets too far apart on your laterals, then you leave oil/gas in the ground - this is where a petroleum reservoir engineer earns his keep!
Newtofo: I wouldn't fret too much over the Santos/Leaseholder situation - I have heard Santos intends to be in a position to drill wells this next dry season. There will be 'arrangements' negotiated to move the project forward. If I was going to fret over the situation it would be more about what Santos has to give up in the process. Any workout between Santos and the Leaseholder could likely set a precedent for negotiations in the Beetaloo Basin going forward.
Here in the states oil companies sometimes pay a crazy amount of money to non-mineral landholders. Upfront access fees, fancy fences/gates, paved roads for ranchers, yearly damage checks - all in the name of keeping peace with the non-mineral landholder. In a way it makes sense to work with these people - damages are a way of life and a good source of income for those who have no mineral interest - Santos needs to take care of this leaseholder but keep it reasonable. I've said on this board in the past that Origin/Falcon needs to pay damages for roads/pads/tank batteries, pipeline right of way, etc. Being a good 'neighbor' can go a long way when people start punching holes and building roads, pads etc., here, there and everywhere during the development phase.
Newtofo: I wouldn't be too concerned with regard to Tamboran's share price. If you will recall, the day before Origin announced the Amungee discovery (with all the excitement it generated) Origin/Falcon stock was flat to down. I found out later that Origin had some really tight controls they held over their employees/contractors and Origin was monitoring their stock trading very closely. If Origin could contain the Amungee discovery information then I expect Santos could do the same - these oil companies operated under these standards all the time - they can't afford to have information leak out prior to their release of public information - the Halliburton's/Schlumberger employees are likewise used to operating under these 'tight hole' restrictions.
LongKnife: If you are referring to the dampened stock price I think that could be a couple of things. There might still be some pressure on the stock from year end tax planning, but I think the real dampening is a result of people not fully understanding the court ruling - as most on this board know, it has absolutely nothing to do with Falcon - now or in the future - it is a non-event for Origin/Falcon. I'm as optimistic/bullish on this stock as I have been in a long, long time. All we need at this point is a 'blow-out' (not literally :^) initial flow test followed up with a really nice EPT in 30 - 60 days. Fingers Crossed!
Nami: IMO the 'end of the year' is just for guidance. I don't think even TBN can tell you exactly when the wells will clean up sufficiently to run the initial flow test Timing could be this next Tuesday as you say but it might be the following Tuesday, Wednesday, etc.. Being some of the first fracked wells in the Beetaloo the exact timing is a bit of an unknown. With that said we should know in short order - I for one, based on the vertical well bore flow rate and Sheffield's interest in these wells and the Amungee revised flow rate, believe that we are going to see strong flow test rate(s). What I don't know is if they will be reporting a comingled flow rate or rate for each well. I am hoping for a combined flow rate of about 10MMCF/d or better - GLA
Curious: Did the You-Tube playback work properly for you? I have tried to watch it twice but the voice and slides do not match up. From the higher pitched voice quality, it sounds like the voice portion is playing back faster than a normal playback which then gets farther off being synced with the slides as the video is progresses- this makes it hard to follow. I watched the event live and know enough to follow the video but it likely would be pretty confusing for anyone who trying to familiarize themselves with Falcon and the Beetaloo presentation.
From Scott Sheffield's mouth to gods ears! He sees the huge potential in LNG prices in Japan (Asia market). This is coming from the largest shale producer in the Permian Basin and who's son Bryan is now a new Tamboran stockholder.
"Sheffield also said he is concerned with the possibility of oil pricing following what is happening with LNG prices in Europe and Japan. “That’s equivalent to $200 oil,”
Pioneer CEO Scott Sheffield told CNBC this week that he sees oil prices headed north of $100 in 2022. Sheffield in an interview with Brian Sullivan said he was surprised by President Joe Biden’s release of oil from the Strategic Petroleum Reserve into the market, saying it was a “Band-Aid” approach and similar attempts won’t have much of an impact because demand will create a tight market by the end of 2022 and into 2023. “Oil is moving back to Brent $75 (Tuesday) morning and will probably be back up to $80 or $85 here in the next few weeks as demand comes back,” Sheffield said. Sheffield also said he is concerned with the possibility of oil pricing following what is happening with LNG prices in Europe and Japan. “That’s equivalent to $200 oil,” Sheffield said. “And so right now oil is cheap.” Sheffield said during the interview that “most people estimate a 4 million barrel a day increase in demand and that by the end of 2022, “we’ll be back … to 100 to 101 million barrels a day.” He also quoted Amin Nasser, chief executive officer of Saudi Aramco, about OPEC and OPEC+ being out of supply and extra capacity in 2022.
Darnit: Don't be so sure that a potential raise in not in Falcon's future. Once we get a declaration of commerciality the share price of Falcon will better approach 'fair value'. At that point it makes sense do a raise for the EP76 well if that well makes sense to help prove up our value.
Newtofo: I am confident there remains sufficient carry for the two 'proposed' Amungee wells. As previously mentioned, it it highly likely based on economics of proving commerciality that these two wells will be consecutively drilled/fracked on the same pad as the existing Amungee well. Falcon would not enter into the drilling of these two wells without having sufficient carry to complete both the drilling and fracking - I think we would have already seen preliminary indications of a capital raise if that was being contemplated. I have heard that due to timing/rig availability, the EP76 horizontal test well would not be drilled until 2023 and that a raise would likely be needed for that well. The EP76 well is contingent based on potential buyers interest - it will be drilled if that is what it takes to get a maximized price for our acreage.
I am still hopeful that after commerciality is proven that a new company might be formed by Origin and Falcon's Beetaloo interest with their interest purchased by stock in this new company - that is simply my pipe dream at this point in time but IMO it makes too much sense to just ignore that scenario. At that point farm outs and capital raises could be completed to move the Beetaloo development forward. All just IMO.
Newtofo: Heard that two 2000 meter wells were being planned but then again with the two Santos/Tamboran wells is Origin required to drill two additional wells to prove commerciality when one might suffice? I believe one also has to look at rig availability and the economy of drilling two wells side by side. - much easier/cheaper to skid the rig over and immediately drill the second well - also economics are to be gained by fracking two wells back to back on one pad. Time shall tell!
I would like to see a EP76 horizontal if it rig availability/timing permit but would a test well 1000 meter horizontal prove up commerciality at this point? - I don't fully understand the boxes that need to be checked before claiming a commercial discovery.
Newtofo: If the T2H and T3H wells come in at the anticipated rate (comingled production in the neighborhood of 8 -10MMscf/D or better) then I would bet that Origin will drill their next two wells on the Amungee NW - 1H pad. Origin's PRIMARY goal of the 2022 drilling program is to drill two 2000 meter wells to prove commerciality - Origin is not trying to prove us additional acreage or looking to undertake the additional time/expense/risk by stepping out into a new area. Origin has the permits and pad built for these next two Amungee wells so they can hit the ground running next year.
Regardless of Oleo's take, Origin/Falcon are pretty confident that the normalized 5.2 - 5.8MMscf/d flow rate out of stages 8-11 (200 meters length) Amungee NW 1H well looks to be a reliable estimate. All the seismic/vertical test wells/logs and now hopefully the T2H and T3H wells assign a pretty good production potential of the 'table top' Middle Velkerri formation that runs throughout 95% of our 4.6 million acre concession.
With the natural flow rate of the vertical T2 and T3 wells, I suspect that Santos/Tamboran's excitement is more than just stock hype - these look to be legitimate solid wells. As I also have mentioned, with Bryon Sheffield's enthusiastic purchase of 7% of Tamboran I suspect he's seeing something to be pretty excited over. This next month could in fact be a big game changer for the Beetaloo Basin and our bird.
The Sheffields are a long time Midland Texas Family. Pioneer is a well know and respected operator in the Permian Basin shale plays. IMO, With the reputation these guys have this is fantastic news for our adjoining acreage. Bryon and Scott see something they really like with Tamborans's Beetaloo acreage which sure makes me feel very positive about Falcon's acreage position. Just another reason to hold.
GLA
Cheddercheesseman: I have heard that today's fair value of Falcon is about 40 usd. It is thought Falcon's fair value at year end, conditional on if the Santos Tamborini horizontal test wells come in as anticipated, will raise the fair value of Falcon to about .60 usd. As Origin, Santos, Tamboran and Empire news brings attention to the Beetaloo Basin the share price of Falcon should begin to respond, coming more in line with its true fair value. With the successful completion of the two 2000 meter Amungee Horisontal wells in 2022 and a claim of commerciality, I have heard a $1.00/share being tossed around. Of course fair value does not necessarily equate to the stock price of Falcon - potentially to receive fair value one will have to stay invested in Falcon through the sale of its acreage position. If Falcon were to raise money to participate in a 2023 drilling program then Falcon's fair value would go up even more for those who choose to be patient and wait it out.
It is safe to say that Falcon 's current stock price is far undervalued. Part of this is managements decision to let the stock value of the company grow internally and not through promoting/hyping the stock. I've never had a problem with this as I am in Falcon through the sale and dissolution of the company - I do understand why many on this board who are shorter term investors find this situation frustrating. It is my opinion that if one is in Falcon for shorter term investing then they may be better off in other stocks.
Newtofo: Seems many times we are in fact connected at the hip LOL! Poods is even coming around to our side once we got him past the reverse split track - Just kidding Poods as you and I have had our extensive reverse split disagreements in the past! Based on Pood's stated shares one thing is certain, we all agree that FOG is way undervalued at this stage and is money in the bank going forward.
The Haynesville Shale undeveloped acreage valued at $1483/acre reflects the huge potential value of FOGs 1+ million acres in the Beetaloo concession. Once the Santos preliminary test results are reported at year end (assuming they are as successful as predicted) this stock should come to life and become more fairly valued. The next big step after that will be 2022 drilling programs of Origin, Santos, Tamboran, Empire that entails Origin drilling two 2000 meter horizontal Amungee wells and the other operators further proving up their Beetaloo acreage - at that point there will be claims of commerciality in the Beetaloo and then Poods will be a hell of a lot richer than me but I will smile all the way to the bank with him :^)
I can say that I am more optimistic about FOG's potential than I have been in a long, long time. Hold on for the ride as its going to be fun - don't be tempted to sell too early as there is lots of running room left in our bird.
GLA
Darnit: Remind me again why Falcon's BOD and CEO POQ should be the subject of lawsuits - The last time I checked Origin was the general contractor as is Santos and Empire. If those three operators choose to share data - which I can assure you is the case - how does Falcon become legally obligated to share other's data - you seem to forget Falcon is being fully carried. Furthermore, if any of these company's engineers, geologist, etc. elect to talk/share with each other what value is that to the shareholders of these companies. Each company releases data that they determine to be material to their shareholder such as flow rates, gas composition, etc. Most people would find no value in the minute detail of log reports, lab analysis, etc. - what's important to we shareholders are the material results of these wells which I can assure you will be released as the operators see fit. There is no legal obligation to release any data that in itself is not considered material to a stocks price regardless of who is paying for the funding . We are all frustrated on how this is dragging out but IMO you are barking up the wrong tree on companies sharing each other's data in this newly explored Beetaloo/McArthur Basin.
Good Luck to all of us.
Newtofo: I am seeing the same scenario as you mentioned. I think Kyalla 117 goes on the back burner for the time being to be looked at at a later date - lots of potential but Origin needs to get back to what they know at this point of the project.
As you indicated a Middle - Velkerri well at/near the Beetaloo W-1 site would be the next logical location for a full blown horizontal well as the table top formation seems to run all the way down to at least that vertical test well and likely further south. If the Tamborini wells prove as successful as early indications and a new Origin/Falcon horizontal down south around the Beetaloo W-1 proves successful then Origin/Falcon have proved up a sh*t load of commercial acreage - that's where we need to be this next year.
I don't yet understand what we do with the Velkerri flank well - I assume that if this vertical well looks promising a horizontal test well could follow up next year? Of course Origin could also drill another middle Velkerri which would likely be the end of the farm-in commitment for Origin and earn them 78% of the Beetaloo? Maybe things clear up as time goes forward.
Maybe a question for Nano or some petroleum engineer, but I would think with the Santos wells being deeper the pressures would be greater giving those wells a higher production rate. As you mentioned, with the wells being about 1000 meters deeper the cost goes up but maybe the increased production would offset those economics. Also as you indicated, Santos can call the deeper Velkerri formations the 'core' but IMO Falcon's table top across millions of acres would better qualify for the core IMO! If 2,000 sq km surrounding the Amungee well proved up a contingent of 6.6 TCF what amount of commercial potential reserves would a triangulation of the Santos, Amungee and Beetaloo W-1 well prove up - fun to think about.
Even through all these setbacks the last few years, the Beetaloo concession still holds massive potential. Hopefully the next year will give us a much clearer picture of this world class discovery. GLA
Hey there newtofo - I haven't been watching Origin stock price but I have heard rumors that 'someone - INPEX?' has offered Origin/Falcon $2.5 billion for the Beetaloo assets - not near enough IMO but if that is a serious offer then Origin will be compelled to make it public. Started hearing this about the time Falcon stock started moving. Again, this is not confirmed - I have just been sitting back waiting to see some type of confirmation. Even if Origin/Falcon turns that down it could benefit Falcon's lingering stock price.
I'm still hung up on my thesis that Origin buys Falcon's interest for stock utilizing a new company. Then the new company could sell off or farm-out portions of the Beetaloo to the benefit of the new shareholders which would include the current Falcon shareholders. I have also thought that there would need to be some degree of commerciality proven up before Origin would move forward on any such reorganization.
Back to hitting the snooze button.
Hey there Eyedoc. I'm still lurking in the background - not much to post on nowadays. I hear rumors that there are 'plans' in the works at Origin and we Falcon shareholders will be pleased with it - what that means I don't know. If I were to guess what that 'plan' might be it would go back to my previously stated opinion that Falcon is likely bought out in a stock deal by Origin - hopefully by Origin's "new-company" E&P company stock. I would further speculate that before that happens Origin needs to prove up more assets in the Beetaloo.
Does that happen prior to the full blown horizontal wells in 2022? IMO that is a possibility based on what the 2021 drilling programs proves up (Origin and others).
All this is a WAG on my part - the rumor is from a decent source but it is still just a rumor and nothing to hang your hat on.
This is going to be an interesting summer with the three projects on hand. I suspect we will be hearing more on these projects in the next couple of weeks.
GLA
Darnit - Curious - Whom are the other 'Beetaloo players' which are/will be are testing the Kyalla. As I recall the Kyalla is a formation which is exclusive to the Origin/Falcon's acreage. Origin may be awhile adjusting its strategy to incorporate what it will learn from others.
By the way, 'Monkey see/Monkey Do' is a well known and accepted approach in exploratory and even developmental drilling. Its not uncommon for technology to be shared amongst companies to help unlock the best approach to new formations. I'm pretty confident that Santos/Tamboran will be exchanging production techniques with Origin on the Middle Velkerri - same with Empire and Origin on the Velkerri Flank. Sharing information is beneficial to all sides - particularly with these tremendously expensive horizontal wells.
Newtofo: Thanks for your continuing input on this project. I decided to step back from the board until there is something worthy to discuss.
I viewed the recent Falcon news announcement as positive. The Kyalla #117 has been a disappointment to date so hopefully this year we will get a bit more clarity on this formation's huge potential. Empire seems to be very encouraged with it's Velkerri Flank's early indications - Origin drilling an exploratory vertical in this formation makes good sense - wouldn't want to leave that rock unturned. You are spot on regarding the Amungee Well. The Tanumbirini #1 well about 20km east of the Amungee shows huge potential in the Middle Velkerri formation. If Origin in fact lost production in over half the stages of this well then that could mean the well has huge potential compared to it's reported EFT. From reports I have heard, the commodity price of LNG should be increasing in the coming years - as you say a 4/5mcf/d flow rate with strong commodity demand starts making big commercial sense - especially with the Velkerri's 95% aerial extent.
I've had discussions with some regarding how Origin is dragging its feet and many on this board think it must be for nefarious reasons. Someone on the board was even wanting Origin just to go ahead and drill all its wells and get this over with - what a crazy idea! The two budgeted full blown horizontals are what is going to make this a commercial concession - Origin doesn't want to **** these two wells off by drilling them anywhere other than what they feel holds the best potential - the three projects being drilled this dry season should help them in deciding where to pin their hopes. To sum it up, moving forward this dry season is about maximizing millions of dollars of drilling cost - it has nothing to do with trying to rush things up to placate some of its impatient stockholders.
Thanks Again for standing up for the decisions of Falcon/Origin.