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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.
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.