Proposed Directors of Tirupati Graphite explain why they have requisitioned an GM. Watch the video here.
BorntoBouggie - Its hard for the market to put a valuation anywhere close to what we want on the Beetaloo until Origin/Falcon prove-up commerciality - thus the 2 proposed full blown horizontal wells. We are currently in appraisal mode and admittedly off to a rough start at that. IMO to get the TRUE value out of this concession we need to remain in this project for more wells than we have left - I don't have an answer on how that happens. Until Origin proves up some commercial acreage the market is only going to value the Beetaloo on highly risked acreage surrounding a hand-full of test wells with the Amungee being a 2C discovery.
We need to see where the next well leads us - after that Origin/Falcon will decide where where to stake the next 2 full blown horizontals. Offsets to the Amungee would be low-risk but the commodity pricing is not ideal for dry gas - at least at today's pricing. The Kyalla was to be the preferred sweet spot but we are all aware of that current scenario. Telling times.
Right now, IMO, its too early for all this doom and gloom we see on this board regarding how cheap Falcon stock will be at the sale.
Sorry for I know I'm preaching to the choir - certainly not trying to talk down to you - just wanted to get some of my thoughts out there. Like you I see the picture clearing this next year.
BorntoBoogie: " If it again disappoints it's not very good news and we'll be fortunate ultimately to recover much more than the current price."
This is coming from an optimist but the above statement looks a little too pessimistic IMO. If the Kyalla disappoints then Origin moves on the the Velkerri Flank well or possibly moves up and prove commerciality of the Amungee dry gas wells. Then again there is a distinct possibility that Origin drills another Kyalla well - they were pretty excited about the rock they were seeing prior to encountering the water issue.
As you, I am sitting on too much stock to even think of taking on more. I was hoping for a stronger 2020 year-end evaluation just to validate to myself that we are moving in the right direction - Oh Well! I still feel very positive about the project but we have sure had our issues with this investment - it kinda feels like we are in the oil business :^) Seems like we manage to jump one hurdle just to come up on another. I'm ready for Origin to start proving up what I believe to be a world class concession. GLA
Poods: Understand your frustrations with management - fair enough. At least you seem to have a grasp of the industry and what is having to be dealt with. As you pointed out "**** Happens"!
It might surprise BCnatgas that Origin likely has 3 to 5 year drilling and budget plans - they are just very fluid at this point of the appraisal process.
Greenlanteren64: " I cant believe they don't have their drilling plans laid out for the next few years, truly shocking."
'Truly shocking' that you would make such an asinine statement. Origin is still drilling appraisal wells and you want them to have all their E&D plans laid out for the next few years?? Maybe you could help Origin out and tell them where to stake the Velkerri dry, Velkerri wet, Kyalla or potentially the Hayfield wells in the upcoming years. Maybe, while your at it, you can scratch out on the back the same napkin the layout to build the all weather roads to your selected locations. Also now would be a great time to plan all the gathering systems/tanks since we now apparently know the well layout and makeup of the gas/liquids. Really!!
You must be working hand in hand with BO - He wants to run all over the outback drilling all the vertical wells before any results are known on which to base decisions on what formations or locations to drill horizontals - while Origin has access to a rig just go out and start punching holes! Between you and BO you two guys could revolutionize the oil industry :^)
Its amazing the talent/expertise we find on this board. Me - I think I'm better off sticking with the incompetent management.
Hey Newtofo - I don't feel that I have much to contribute to the current discussion. I was pleased with the Cenkos report concerning the components/percentages of the wet gas analysis - appears to be good economic potential in the Kyalla's wet gas make-up. Still the big unknown is the potential flow-rate of the well and it doesn't appear we will know that for a bit.
IMO, Origin has two main options right now. One is to drill another Kyalla horizontal 'test' well (1500m) - the rig is basically on site and though still early, the Kyalla formation is now better understood than an alternate Velkerri Flank well which would carry more risk. The other option would be to move the rig to the Velkerri Flank site and drill a vertical test well with the all the necessary testing such as DFIT's etc. before committing to a horizontal leg. Normally Origin would give the Kyalla #117 time to clean itself up and show its potential before undertaking the next well but then as we know we have the upcoming dry season widow that needs to be drilled.
I don't have any feel for which option Origin takes - they likely know more than they have released on what the potential problems might be with the Kyalla #117 - that would enter into their decision on how to proceed. If Origin believes they can get away from the water issue with better flow rate in another Kyalla well then I suspect, with the analysis of the wet gas, that would be their choice.
I am encouraged with the current strength in the LNG commodity pricing. I don't know how seasonal that pricing may be but I am hearing long term the LNG demand looks to remain strong - thus the Australian government's/Jemena's interest in building out the infrastructure/pipelines. With strong long term LNG pricing, the Amungee dry gas play becomes more economical and attractive. IMO, the long-term outlook for the Beetaloo remains very promising - without all-weather roads Origin is a little hamstrung on doing this necessary appraisal work - that will change in time.
Still, IMO, the big solution to our timing and execution concerns would be for Origin to spin off the Beetaloo holdings into a new E&P company and issue about 22% of the stock to Falcon as a stock buyout. That would leave us Falcon stockholders in a better position to realize, longer term, the huge potential of this 4.2 million acres of the Beetaloo. If we get our 22% of a new company then timing at this point is not critical. Acquiring Falcon is a stock buyout would avoid trying to evaluate this huge concession with so few of wells. It also allows Origin to acquire us without a huge outlay of cash. Yes we could be sold to someone else but then what price would be get only holding a minority interest in the project. Then you still have the undivided interest issue. Call me crazy but I believe a stock buyout is in our future.
Stebol: Agree 100% with you thoughts - Thanks
Newtofo: A pump jack could unload the water as long as it's not flowing into the bore faster than you pump it out - otherwise what are you accomplishing other than dealing with massive saltwater disposal expense. If there is a limited amount of heavy saline water then jetting using nitrogen should clean the well out sufficiently to allow the well to kick off. I'm not an engineer but I believe the next solution would likely be to try to squeeze off the area producing the water. Origin/Schlumberger/Halliburton will come the best solution.
LongKnife: Once gas breaks through it will be flared. That would continue through 'clean-up' of the well. When the well has sufficiently cleaned itself up then a flare would continue to burn as long as the test which I assume could be up to 90 days. After the test the well would be shut-in capped with a 'christmas tree' such as that used on the Amungee.
First we have to see a breakthrough - quite honestly I'm surprised that has not happened yet. As some point if the nitrogen lift doesn't work the well would be shut-in while the engineers scratch their head. Even if they have to move to another well they would likely come back to the Kyalla #117 once they have a solution is at hand. The next well could be another Kyalla well or the Velkerri Flank - the Kyalla is much better understood so my money would be on another Kyalla.
I don't want to be pessimistic, as it's far too early for that, but some wells frack into the 'ocean' with the water cut remaining too high to allow for sufficient gas/economics - this water is too expensive to dispose of - especially in this case where Judge Pepper nixed ever reinjecting excess water back into a formation - all this water that can't be evaporated in a pond has to be trucked off to who knows where to be disposed of which is a terribly expensive proposition.
For now lets keep our fingers crossed - Origin/Falcon will let us know something when they have news.
Not that I would have been a star commentator but I couldn't get through to ask any questions - anyone else have a problem? Anyway, right now not much to ask as we are in a wait and see mode on the nitrogen lift. With all the good indications seen in drilling the Kyalla horizontal I am very hopeful that we soon see a breakthrough of gas. Until then we wait!
Poods - just catching up on the board - so sorry to hear about your wife. Puts things in perspective.
Also wanted to say that I agree with most of this post. As much as I hate to criticize the fracking experts on this board I think I will stick with Origin. I’m sure they have engaged the top experience in this field. Many don’t appreciate the uncertainties when drilling any well much less a new never been fracked formation as the Kyalla. Hopefully the engineers will find a solution and all turns out well.
I believe we are in good hands with Origin. Yes they operate like the typical large oil company vs. the smaller and more agile independent but I know here in the states that more likely means things are being done properly - with the additional cost of course. :;:^(
I know for a fact that POQ is pushing as hard as he can to speed things up - Maybe we see the nitrogen injection this month or early January - we’ll see.
Take Care - Wet
Longknife: From what we have heard there is a potential water issue - that's about all we have been told. One way or the other Falcon/Origin will soon be issuing a release clarifying what is going on. Stay tuned.
AnimalSpirit: My take - which is just my opinion - The EMP is required to obtaining the permit to drill a well. That permit gives the right but not the requirement to drill a well. IMO, Origin is just getting their ducks in a row in case the Kyalla 117 #1 kicks off with good positive results. If the well performs well then those two additional permits will be required. I believe Origin has already filed an EMP for the Velkerri flank well - that may or may not be used.
Origin was extremely pleased with what they encountered in the horizontal drilling - all indications looked good - Origin still has high hopes for the current Kyalla well but they need to solve the current problem before they commit to two more Kyalla wells. As we approach the dry season Origin may be forced into a position to move the rig and drill the Velkerri flank well - With that said Origin would not be giving up on the Kyalla formation.
I suspect before long we will hear more details on the Kyalla 117#1 well - its been 2-3 weeks since the last update - if the well is still just making water then I would expect it to temporally shut in while the engineers try to find a solution.
Longknife - The wet season will likely not end until March. The rig will be moved in April when road conditions permit and the next well is scheduled to be drilled May 2021. The question now is whether the rig is moved back onto the pad or to the Vellkeri flank location. With an April 'move' date, Origin has a while to figure out the Kyalla #117 well before committing to their next move. Technically speaking, the 90 day flow test of the Kyalla #117 might not be completed until April if Origin struggles with the potential issue and cannot begin the 90 day flow test until after the first of the year. Hopefully that is not the case but I can assure you that Origin is not giving up on the Kyalla without giving it its all - they've spent too much money to just shrug their shoulders, pack their bags and move to the next location. Even if the Kyalla continues with its water issue (if that is the issue) Origin will likely revisit that formation in the future.
I don't know when that quote was written but it is a little incorrect - as ITguy mentioned the April/May timeframe is for the next well - where-ever that may be.
John and Oleo: Yes - I do know I am right on this - pretty much comes from the horses mouth - not any undisclosed information here - just basic facts. Philip has a legal obligation to release material information - Falcon is a 22.5% partner in the Beetaloo - be assured Origin and Falcon are in weekly if not daily communication. I don't think I am speaking out of class to say that Origin has no final say on this - if it is material to Origin then it certainly will be such for Falcon and both companies shareholders will see a news release. If news is not material to Origin but is for Falcon then Origin wouldn't stop a legally mandated Falcon release - realistically, if this was the case, Origin wouldn't fight Falcon on this - for Origin it would not be a material event for their shareholders.
I'm sure Falcon seeks Origin's approval in these matters but when push comes to shove Falcon follows the law.
Back to the flare - no that would not be a material event for Falcon or Origin in itself as that would be pretty unquantifiable (color, appearance?) but the 24 hour initial flow test will be important to both companies.
GLA
Oleo: As I understand it, if info is material to Falcon shareholders then Falcon is permitted (and mandated by law) to release that data. You can have information released by Falcon that would not be released by Origin. Just because Falcon has farmed the Kyalla well out does not release it from the fact they still own 22.5% of the project. Is a flare (size color etc.) material - I doubt it, but after the initial 24 hour test is performed it will be released to the shareholders. We will know in good time what the Kyalla offers. If Origin shuts the well in to study data and ascertain how to fix a potential issue then we will know about that also - right now obviously we know nothing.
Newtofo: I'll join you and Poods :^) and any others at a pub in Dublin to cuss and discuss POQ, Falcon, Origin, etc. As far as the golf course - you may not find me there unless I get to drive a cart and pop a few.
I would be stunned if any type of deal is addressed at the AGM - too soon for that. If I was to ask questions they would pertain to when Origin is going to buy us out, how would that deal be structured and what does Falcon see happening over the next 2-3 years - yes, I firmly believe we are in this project until 2022/2023 if we are going to see any type of decent return on our investment and I have to host a Texas golf tournament :^) IMO, those would be unanswered questions that would go nowhere at this point in time though I still believe a stock buyout by Origin makes the most sense to me - so says my crystal ball Namu.
Poods: Don't hold your breath waiting to see my proxy votes ,which match or exceed your often touted total, in the opposition column. Likely not a surprise to you or many others but I will be voting with the company on this one.
OrsonM: My sentiments exactly - Thanks for pointing this out to the board.
We have every early indication that the Kyalla #117 holds huge potential. Hopefully the Kyalla kicks off in the next couple of weeks. If the well is not flowing gas in two or three weeks then there might be a water problem - if that is the case Origin has the experience and knowledge to address and fix that problem. The well would likely be shut in while the engineers scratch their heads to find the best solution - 500 bbl/day of water is a lot of water to dispose of which nowadays can get rather expensive - especially in the middle of the Beetaloo. All I am saying here is that if the well does get temporarily shut in don't panic - it doesn't mean Origin is abandoning the Kyalla - they are just trying to ascertain a solution.
I am optimistic that all this will all be resolved - this is the first time the Kyalla has been horizontally drilled and fracked - lets leave it up to the professionals to get all this sorted out. With the wet season underway nothing is going to happen fast as far as moving a rig, etc. - looking at April next year - Origin has lots of time to figure this out if in fact it is a problem - for all we know right now there may not be one!
OrsonM: My sentiments exactly - Thanks for pointing this out to the board.
We have every early indication that the Kyalla #117 holds huge potential. Hopefully the Kyalla kicks off in the next couple of weeks. If the well is not flowing gas in two or three weeks then there might be a water problem - if that is the case Origin has the experience and knowledge to address and fix that problem. The well would likely be shut in while the engineers scratch their heads to find the best solution - 500 bbl/day of water is a lot of water to dispose of which nowadays can get rather expensive - especially in the middle of the Beetaloo. All I am saying here is that if the well does get temporarily shut in don't panic - it doesn't mean Origin is abandoning the Kyalla - they are just trying to ascertain a solution.
I am optimistic that all this will all be resolved - this is the first time the Kyalla has been horizontally drilled and fracked - lets leave it up to the professionals to get all this sorted out. With the wet season underway nothing is going to happen fast as far as moving a rig, etc. - looking at April next year - Origin has lots of time to figure this out if in fact it is a problem - for all we know right now there may not be one!
BO: Its been said the Kyalla well is comparable to the Marcellus Shale wells. Some of those wells require recovery of up to 35% - 40% of the frack fluid before they 'kick off'. Last I heard the Kyalla had recovered about 15% - 20% of the frack fluid. The well initially flowed back frack fluid through the casing before the production tubing was installed into the well. I take that to mean that the well was likely over-pressured by the fracking of the well and as this pressure bled off the production tubing was required for the well to continue to unload fluid. IMO its too early to tell what the final results will be. I remain optimistic at this point but then I should have been a geologist!!
How long should we expect before we know? - That is still a bit of an unknown - it could be tomorrow, next week or # weeks. Falcon will make that announcement when the 24 hour flow test results are known.
Somewhere in the permits there is probably an estimate of how much frack fluid would be required. If it were say 100,000 bbl and we have recovered 20,000 bbl to date then to get to the 35% recovery number we still have about 15,000 bbl to recover at 500 bbl/day - you do the math. In the meantime we wait. This is all just a WAG on my part - I never received my petroleum engineering diploma :^) Maybe Nano can jump on to the thread and give us his take.