Enough: Not waving Bruner’s Flag! Ultra brought up Ultra Petroleum. Some saw Bruner’s promoting first hand - witness Ultra’s post. Can Bruner do it again with Fortem - we will see - its an interesting story. Paltar certainly didn’t work! Let’s get back to Falcon - the subject of this board and how to best make money.
I have no idea what that post means? Maybe it’s ****tail time where you are. If you mean my friend that was in Ultra he is a personal friend of Bruner - he still talks to him regularly and is the guy that got me involved in Fortem. Don’t know what set you off? Maybe you’ll get over it !
Ultra: Understand about Ultra Petro. Have a friend who got in at .15 and thought he had picked the top at $7.00 only to watch it go to $200 - ouch! FYI - If you’re a Bruner fan he is starting a new company called Fortem which he of course says will be a home run. I bought a little just to see if he can work his magic again.
I’m in Falcon until the final bell. I am tied into this stock pretty tight and really like what I see and know. Of course it is still drilling with all the unknowns but the company looks to be off to a good start. I wouldn’t even consider selling until the 2020 wells are drilled whatever that shale target might be.
Calling my next flight - gotta run - later
Namu: Sorry Guy - I'm lacing up my hiking boots and packing my bag for a flight in a couple of hours. I'll probably peak-in on the board every now and then to keep an eye on you. If you've gone into self imposed exile when I get back it's been fun - looks like Ultra is going to be taking your place plus he post nice video links to boot! Don't forget to pack extra undies - exile can last a very long time! Bye :^)
Thanks Schlemiel. "Mult-Decades Opportunity" make me feel warm and fuzzy about this investment - sounds like Origin foresees lots of potential. Concerning the Kyalla well - "The well pad construction is nearing completion"- sounds like the future tense to me. At this rate we may have a multi decades opportunity :^)
Thanks for posting.
Very impressive Ultra - keep us informed of your buys and sells so we can follow your trading. Between yours and BO's lead we will may all get rich 'trading' Falcon. BO has the nasty habit of telling us about his fantastic trades after the fact; sometimes his prices and volumes don't quite work out. Please keep us posted in real time because I certainly don't want to become a bag holder.
Now I have a really tough call to make - Is Ultra or Namu the self appointed smartest person on the board :^)
Favor Request - You never responded to what you think the final sell price of Falcon will be - surely someone having the best trading record in this stock must have a really solid target. Please share since you obviously thought my $2.00 was crazy low - Maybe you're looking at $7.00 again? - could happen.
Seriously, I do enjoy some of your videos and posts - thanks for your contribution to the board.
KMJ: I think there are multiple approaches to evaluation - As Shalamar9 referenced, the DAVY methodology of assigning a value to the proven acreage is a nice approach. There is nothing magical about the $4000/acre figure - that could just as easily be $6,000/acre depending on engineering studies. I'm sure the actual proven reserves would come into play also in assigning an acreage value. Reserves are what banks loan money on and companies pay for. How about multiple pay zones - that's a big add.
One thing I don't understand is how the risking comes into play. Our 6.6 TCF of contingent resources are currently risked at 90%. If Origin proves up commerciality with two additional wells how much does that risking decrease - are we looking at 50%?, 30%? prior to production. If we are currently valued at .40/share then adding two more Amungee wells could theoretically increase that to $1.20/share - then derisk our proven reserves to 30% and Falcon is suddenly valued at $3.60/share. Of course we also have the potential of the Kyalla and the Velkerri wet gas.
All this is somewhat a pipedream but should begin to FINALLY clarify in the next 12 - 18 months.
Shalamar9 : I think $4 - $5 share is obtainable - Falcon's big limitations is that we only have 4 wells remaining. If FOLGF were to have a nice discovery in the Kyalla they could potentially use the 2020 wells to prove up commerciality in that zone and the following year participate in drilling two additional full scale horizontals offsetting the Amungee well. Proving commerciality in those two shales horizons could provide reserves in multiple pay zones (not resources) resulting in a nice sell price. I was led to believe at one time that POQ would consider participation in additional drilling if the financial returns justified the expense.
The $4009/acre is a good metric but again it would only be on proven acreage - a limitation resulting from only having two carried wells to prove up that $4009 acreage. I think that same report had non-proven acreage valued at about $225(?)/acre which I thought was a low considering the seismic, vertical test well and the 6.6 Tcf of proven contingent resources.
This next 18 months will prove to be exciting times as opposed to the last 36 months - Now we just need to get that first highly anticipated press release.
Thanks for jumping out there with you thoughts - your guess is as good as mine - it's interesting to see what people expect out of this investment.
Ultra: Maybe you should stick to your specialty - posting music videos - But since you insinuated $2/share is way low (or so that is what I took from your rather ranting post) please tell us what you think a reasonable price might be for 6.6 Tcf of contingent resources at this very early stage of exploration (remember we are currently risked at 90%). You can try to claim 40 billion barrels of oil/condensate and 500 Tcf of gas but in 18 months Falcon will have nothing even close to that - those figures will take a decade or more and multiple billions of dollars of capital to prove up (if ever) - good luck developing those kind of RESERVES with our remaining 4 wells. The Beetaloo has no infrastructure, no production and only contingent resources at this point - that is what we are selling - If all goes well we hope to claim commerciality on one of the three prime shale plays. My $2 represents a $6.6 billion dollar current valuation for the Beetaloo. I will be pleased if we get more but want to be realistic with my expectations.
I've offered my price target - I would love to hear what target you have in mind. Serious question - I hope to get a serious response. This is not a trick question - there is no wrong answer here. Your opinion would be appreciated.
I ask this estimated sales price question of blustery posters from time to time and never get a real response. Personally I think up to $5/share could be possible but not with what we know today. Anyone else care to respond? - I would love to hear the various opinions of the board.
Please POQ - Issue that promised news release that the Kyalla well has been spudded - Then we can see Namu off into his self imposed exile!
So Namu: Recent studies show POQ is paid about average for a company the size of Falcon. What do you think a reasonable salary should TOTAL over the last 7 years - $2 million ($285,000/year), $3 million ($425,000/year)?
Take you reasonable salary and deduct it from POQ's $4.7 million actually received. Then take the difference and divide by 980,000,000 shares and then divide that by 7 years - How much is he being overpaid a year/share. How much is that actually costing you? Hint - if you think $2 million is reasonable that works out to POQ being overpaid by .0004 cents per share/year. That works out to about $400.00/year for each million shares owned if you can hire a public company CEO for $285,000/year total compensation - good luck!
For a final calculation take you target acquisition cost (mine is about $2.00) and divide your overpaid amount by your acquisition cost. I think you will come up with a very miniscule percentage of the profit you plan to make. If you think his reasonable salary is only $285,000/year ($2 million) and $2/share is a reasonable acquisition cost then his estimated overpayment represents only about .135% of your estimated profit.
Please go somewhere else to fret and cry - Even using an unreasonable $285,000 average salary, POQ's overpayment is going to be very immaterial to this investment.
Some people like to complain just to hear themselves - Hopefully we won't be able to hear your wails from your soon to be newly exiled home :^)
Newtofo: The flow test will not be impacted by the wet season. The covered on site pits should be sufficient for any unloaded frack water - Origin should have contingent plans to contain the expected volume of unloaded water. From what I understand, once the flow test has begun its just a matter of checking the pressures/fluid every two - three days. It was indicated that this would likely be done by helicoptering in personal for the checks. From diagrams we have seen there will be condensate tanks for capture that liquid. It was also mentioned that there is a possibility that preliminary flow test results might be provided while the extended test could last UP-TO 90 days - knowing Origin I would be surprised if a preliminary results were published but then again maybe Falcon has requested that for the AGM.
I am just repeating what I have heard so take this with a grain of salt.
Namu: I'm calling 'uncle'. I have been assured that there will be a news release when the well is spudded. Because of that I feel certain that drilling has yet to begin. I'm personally tired of being given projected drilling dates to only see them come and go - this has been going on since May. I'm also tired of trying to read the bits and pieces of the tea leaves - Origin has been dealing with the NT permit process which seems to have been never ending and now I suspect Origin is waiting for Ensign to complete the rig assembly or waiting on some other unknown before they can begin drilling.
Looks like the September date didn't hold - I'm backing off any future projections regardless of what I am told. I believe the dates I have been given were in good faith but they are not holding for reasons outside of the control of even Origin Energy.
Quite frankly at this point I'm tired of being wrong! In a couple of days I'm headed out of the office for two weeks - My final prediction is that drilling will happen when it happens - too many unknowns to lock down a date. In the meantime I'm putting the crystal ball in storage - the Oracle is going on a sabbatical!
OrsonM: Curious - So what would you have POQ do to pressure Origin to meet their obligations (other than paying Falcon $20 million and spending $180 million to drill 9 wells, either vertical or horizontal and staked by both parties)? We know there was a 3 year period for Origin to complete the project but per the agreement the clock stopped running during the moratorium. Since the moratorium Origin has been waiting for approval of the 35 new regs prior to drilling any horizontal wells (probably stopping the clock again)- Origin just received that approval.
So are you agreeing with BO that Origin should be out punching 9 vertical wells just to be in drilling mode? This is a horizontal drilling/fracking program to prove commerciality. How does going around drilling 9 vertical wells over the last three years benefit us - do we drill a Kayalla vertical, a Velkerri vertical and two vertical offsetting Amungee wells? If the Kyalla well potentially shows commerciality then we have spent all our money up north on the Amungee offsetting vertical wells which may have never have needed to be drilled - likewise for the Velkerri wet gas play. Do we drill verticals only to move the rig/equipment 50 miles or more away just to turn around and move the rig back a year later to possibly drill a horizontal well? I think BO's plan would have Origin hopscotching all over the 4.6 million Beetaloo acres with all the inefficiencies that go along with that.
Falcon is being carried for 9 wells at an estimated $180 million - Origin and Falcon have spent untold man hours planning on how to best utilize those funds - it amazes me how people on this board think they know best how to proceed with this farm-out program - Pardon me but I think I will stick with the professionals and their best laid plans on how to proceed.
Once again - Origin is the operator of this farm-out per the agreement. Yes technically Falcon still owns 100% of the Beetaloo until Origin meets their obligations but once they do they become 70% legal owners. Even though Falcon owns 100% at this point they couldn't even begin to step in and demand how Origin runs the show - that is absurd and for you to agree with BO really surprises me.
Origin is a public company - BO thinks Falcon has the right to step out in front of Origin, as operator, and announce material information concerning Origin stockholders - if you agree with him on that you really have me scratching my head!
I think the best thing you could hope for is to see a copy of the farm-out agreement - that would be interesting but I suspect we know that is not going to happen. I think we can both be assured that both Origin/Falcon are living up to the unpublished terms of that agreement.
I disagree with most of BO's post - I have told him before if he were running this show we would all be be locked up in court battles or just flat broke - How you of all people could agree with that post is quite puzzling.
Namu: "First accurate statement" - Then you haven't been paying close attention to what I have been posting - I have been saying for years that the ultimate goal of POQ is in the final sale. He doesn't want to promote the Beetaloo or Falcon's share price - it might trigger premature unwanted offers.
I know from conversations with POQ - the real value of Falcon is the closing sale price. He has told me as I am sure others not to ever consider selling my Falcon stock until the final deal is on the table - otherwise you are short changing yourself. Falcon's share price will never approach its true value until POQ pounds the gavel!
IMO Philip's true job is to obtain for Falcon shareholders the top dollar value for its assets. That is where you and I continue to disagree - you continue to look at this as a regular operating company with it associated share price - you need forget today's share price and instead be looking at it as a company proving up its highest possible liquidation value. If Philip can maximize that liquidation value then he will have done his job.
Schlemiel: This has been part of my thinking all along but IMO the sticky part is Falcon's 30% undivided interest. Someone is going to have to take Falcon's 30% undivided interest out of the equation - that someone would most likely be Origin but then that money is going to have to come from somewhere as Origin couldn't afford that kind of investment. The best scenario I see is Origin buying out Falcon and at the same time farming out specific areas of the Beetaloo to INPEX, Santos, etc. Those farm-outs could be structured in any number of ways for Origin to recoup their cash outlay and possibly retain some of the farmed-out interest. For me or anyone to speculate on how such a deal would work would be an exercise in fruition - far too many options IMO.