Member Info for WetWater

Longknife - You forget who was driving the timeline the last 12-15 months. I suspect you are going to see a much more aggressive/vocal Tamboran B2 going forward. It has been stated that the next two wells will begin by the end of October. I suspect the drilling/fracking will be close to if not completed by year-end. We will likely get an IFR on the wells which seems to be standard for Tamboran but as we have been told Origin planned to flow test these wells 180 days - will that 180 days change on these next two wells - we'll see, In the meantime I'm glad that progress seems to be moving forward once again - these next two Amungee wells have certainly tested all our patience.

Frackme: As typical, some can only see as far as the tip of their nose. This deal means nothing to today's market price as most will not understand the potential and the nuances of what it means going forward. This puts Falcon in total control of its destiny. If the Beetaloo proves up to be the World Class Discovery that we anticipate then to quote nevesofsteel - "All is right in the world".

Newtofo; Frackme; BtoB: Wow! - I woke up this morning to an absolutely brilliant deal that POQ put together for Falcon. I am still digesting the details and thinking my way through this but I have to agree that this appears to be even a sweeter deal long term than the original Origin deal. In reading through your posts - I think you have captured the essence of the LOI - no need for me to restate it. Great job!

When one looks at all the options this gives Falcon, its hard to get one's mind around all the potential ways the game can be played going forward. Falcon just moved from the back of the bus to actually being in the driver of our destiny.

I have been pushing for Falcon to adopt the US Texaco model of checkerboarding the development of acreage across the Beetaloo - let others take the risk and then step in and participate in what is basically infield drilling. While that is not the exact model Falcon/Tamboran has adopted, it achieves the same goals but more importantly gives Falcon a multitude of options to participate at the full 22.5% all the way down to sitting on the sidelines and letting others prove up acreage.

Tamboran has mentioned bringing in a multiple partners to help drill 100s of wells in the Beetaloo. One of the beauties of this deal is that the operating agreement covers all 4.6 million acres of the concession. So, as an example, COP comes in as a partner they might be assigned a 200,000 acre block. On COP's block, Falcon has the same options as to what level of participation they elect. The real benefit of all this is that as the "Tamborans/COPs of the Beetaloo" prove up acreage and TCF of gas across the whole of the Beetaloo, Falcon is building up potential reserves. on adjoining acreage to a proved up proration unit. As those reserves build so wil the Falcon stock price.

We are now in the game as long as we wish - at some point a suitor will show up on our doorstep and offer Falcon a nice chunk of change for its 22.5% low ORI acreage. Its all good guys - excuse me while I go out into the market and pick up a few more shares. After these next two/four wells I think its safe to say we are seeing a bottom in our stock price.

The biggest advantage of this whole deal is that it protects Falcon from the likely danger it faced - being forced to raise money when it was not beneficial or timely to do so. As our stock price increase - which it will under this type of development - POQ can raise money on his terms and timetables. We will no longer fear being chocked to death with the potential 100s of wells to be drilled.

Once E&P companies get by the rules requiring SA Blacks be on company boards, employed in technical postitions on drilling rigs, high ORI demands and land appropriation (without compensation) maybe some companies will deal with SA. As the article mentions, SA is a cross between democracy and communism. If SA is going to get this land developed by anyone other than French companies (I recall a treaty being in place with France) then they need to clean up their demands and adopt laws more favorable to these E&P companies.

For those that think the issue with SA is only with our CEO might see there are major hurdles to overcome. IMO, I'm afraid SA is not going to happen anytime soon

Why Expropriate?
The debate over expropriation has much to do with how South Africa’s 1996 post-apartheid constitution treats private property.

Its Bill of Rights references “the nation’s commitment to land reform, and to reforms to bring about equitable access to all South Africa’s natural resources.” That language embeds specific, historically contingent redistributive aims into its fundamental definition of property.

While the United States Bill of Rights does allow for eminent domain, its Fifth Amendment requires “just compensation.” That amendment also clarifies that people cannot be deprived of property without due process.

Responding to the ANC’s pro-expropriation rhetoric, the libertarian Foundation for Economic Education warned in 2018 that “the property rights of all South Africans are at risk, as one cannot truly have property rights so long as the government can arbitrarily take land away.”

Other commentators, such as South African law professor Viljoen, see the justice of expropriation without compensation.

Her recent law article on the push for expropriation, entitled “Wasting Land Amid Landlessness,” suggests that “the state is not only allowed, but perhaps even ordained to overthrow and overtake ownership, with a stewardship vision, in line with the Constitution.”

South African farmer Roos believes the ANC is caught between the idea of democracy and the idea of communism.

He pointed out that the Soviet Union trained many of the ANC’s exiled leaders during the Apartheid period.

Roos worries redistribution won’t end until “all property is transferred to the government.” He cited the nationalization of land in neighboring Mozambique after it became independent from Portugal.

https://www.zerohedge.com/geopolitical/south-africa-may-soon-take-land-without-compensation

Thanks Hardrock for the frack fluid lesson.

BtoB: Wouldn't Falcon have to offer Origin the same 5.5% royalty on that 77.5% to match the Tamboran offer? That's the way most ROFR's work - Falcon can't change or amend the terms - they can only step in and exercise their right.

Hardrock: Nonsense?- maybe, but that comes from two separate PEs close to the project. I'm don't have the knowledge to argue that point one way or another. They need to find a more environmentally friendly name before proceeding LOL! as I would think the green people would rigger with that name. As an aside, whether right or wrong, it is being said that the Aussie government is wanting to get US companies involved that will drill and frack these wells to US standards - that includes US style frack fluids.

Are you saying that petroleum based fracks are not used in the US? I have heard people here in the PB talking about diesel, guaran, etc used to frack wells - all kinds of 'secret' formulations. Help me here as I am not a PE.

Newtofo: As to Falcon waiving Origin's obligation to drill the next two wells if they were to take over - that was my thoughts also until I was told that Origin has a contract/agreement with the Aussie government to drill those next two wells. Therefore, if Falcon executes the ROFR can't legally waive their next two wells. My next question was what if Falcon just drilled the vertical bores - would that meet the government's requirements - I don't know that answer but this is what Tamboran did on its Maverick well - the vertical bore was drilled because it was a requirement with the government - they will go back and complete this well later as was addressed in the Tamboran presentation,

Not many people are aware of this, but Tamboran, next year, will likely be moving towards using US style frack spacing and adopting the use Napalm Gel to carry the proppant. This gel is an hydrocarbon based product currently used in the US. With the extra dry shale bed in the Velkerri B formation, frack water is absorbed at a rate that makes it somewhat ineffective for fracking The production rate of these wells will be significantly higher just based on these twof improvements. I'm sure Tamboran has additional tricks up their sleeve with the help of Sheffield's fracking/completion expertise. These types of technology improvements will be good for Falcon whether Tamboran is a JV partner or not. The higher the effective 1000 meter flowrate that Tamboran can achieve on its Beetaloo pilot wells the greater the excitement in the Beetaloo and the better for Falcon.

GLA

jhealy: I agree with you 100% - today's share price is a gift. I'll take your advise and be careful what I wish for - door A or door B?

From what I am hearing Tamboran is giddy about the Origin/Beetaloo deal. They have big plans to move very aggressively in the Beetaloo. Tamobran will be drilling the next two wells this year but in the meantime will be working to bring in other operators/partners to help drill the Beetaloo. Tamboran will also be moving towards a listing in the US market to help raise the funding to pursue their aggressive plan. IMO, the biggest problem Falcon will have with the Tamboran deal is keeping up with their drilling commitments. Hopefully, if Philip doesn't pull a rabbit out of his hat, he works long and hard to develop a plan to keep up with Tamboran in 2023 and beyond.

With the market exposure Tamboran can bring to the Beetaloo through self promotion and bringing in other companies; Falcon's share price/value should grow with the Beetaloo excitement. So door A or Door B? I don't see either option as being anything but good for Falcon - both have their good and bad points and both certainly have their unknowns. I'm willing to accept A or B and then deal with the what follows. Either way I'm comfortable where I sit today and see a bright future for Falcon over the next couple of years.

Oleo - Regarding your concerns of potential dilution when/if Falcon gains control of the Beetaloo - There are many ways for a deal to be structured. What if Falcon brings in a new JV partner in the process of this transition?. Just how much dilution did Falcon undergo when POQ brought on Origin? I think a new JV partner could be expected to bring $$$ to the table in exchange for a percentage of the Beetaloo - we might even get a few more carried wells out of the deal!

Many ways for all this to play out - I have decided to sit back and watch at this point. Either POQ raises the funds required for ROFR or he doesn't - I can see upsides to either scenario. As to potential dilution we will just have to see what type of deal our CEO delivers. If at the end of the day its status quo then let Tamboran drill the next two wells and then Philip can go about his business of raising funds hopefully based on a higher stock price for the following wells.

I don't see our current situation being a negative for Falcon - I don't understand the pressure currently on Falcon stock but then I have never understood its price action.

Good Luck either way!

BtoB: Thanks for the feedback. It's appreciated and IMO serves the purpose/intent of this board - Posters such as you, amongst many others, want to contribute to the board and express relevant opinions while some would rather sit back, belly ache and complain - all boards have those types. I don't expect everybody to agree with that last "IMO post" but hopefully it makes some people think and express thoughtful responses - Thanks for yours.

I'm not pushing for #2 - but a negotiated settlement with Tamboran would meet one big requirement of a potential partner - they hold the right pedigree which from what I understand is important to the powers to be in Australia. Santos could also meet this requirement but are they even interested? From my understanding, Falcon's partner/deal needs more than just the funding - it needs the blessings of the Aussies. The Beetaloo is a national strategic asset of Australia and their approval of an alternative potential deal will not just be rubber stamped.

IMO, a negotiated settlements seems to come out of these types of deals. Would I like for Falcon to tell Tamboran to pound sand - certainly my top choice but only if that is a really practical/workable outcome.

gnoles: So step up and spin the wheel of fortune! As I see it four spots (likely more)on the wheel so place your bets accordingly:

1). Falcon Raises the money and acquires a JV partner agreeable to the Fed government. Tells Tamboran to pound sand.

2) Falcon Raises the money in full and plays a tough negotiating hand with Tamboran working out a deal to let Falcon add to their ownership in the Beetaloo, Tamboran absorbs Origin's ORI on acquired acreage, and remains the operator and commits to drilling/caring Falcon on the planned additional 2 wells at $80 million cap adjusted for changes in ownership. Falcon comes away with some additional % ownership caring a burden of Origin's ORI on their additional % acquired.

3) Falcon raises a large % of the required funds and negotiates with Tamboran prior to expiration of ROFR - uses the ROFR as leverage to negotiate better terms with Tamboran. Strong incentive to Tamboran to negotiate if Falcon shows potential of additional funds being raised in window allowed for contract execution after ROFR.

4) Falcon fails to raise the funds required for the ROFR and goes hat in hand to Tamboran. Falcon comes away from negotiations basically with a status quo situation.

Likely many permutations of the above. Philip seems confident he can raise the funds required but IMO he then negotiates from a power of strength for additional ownership and moves forward with Tamboran as operator as they are approved by the Federal Government. The big unknown - does Santos have an interest in acquiring Beetaloo acreage?

Sickdude: The $80 million has been a widely publicized figure in Tamboran's news releases. Google Tamboran/Beetaloo and it $80 million will jump out at you as its been mentioned up front in large text. This $80 million firgure has also been widely published in nearly all news outlets covering this deal. What, interestingly , is not mentioned is Falcon's ROFR which is a little bit of a puzzle.

Oleo - You are right in that Hess was involved in something like 37 countries and their board was wanting that trimmed down. The Beetaloo was not that far along so it was a casualty of management. Hess told Falcon they were in negotiations with a world class oil company as a partner but needed more time to work that angle. POQ told them to hit the road and took about $35 million (?) in seismic data. POQ did this without having an active backup plan which was a gutsy move. It all worked out as he negotiated the Origin deal in short order.

So yes Hess may not have been motivated but Falcon didn’t know that at the time but when Hess wanted more time Philip jerked the rug out from under them and went on to find Origin.

That’s the way I understand it came down.

JamesL: Article from 2013 when POQ basically told Hess to go Fk themselves. He took all their seismic data and didn't even say thank you. You don't want to get in a poker game with this guy unless you hold all the cards. Hess found out the hard way.

Chief executive Philip O’Quigley says there is no technical reason for Hess’s decision not to move forward with the Beetaloo Basin project in Australia.

The explorer’s shares fell 7% today after it was revealed that Hess Corp’s proposed five well drill programme would not go ahead.

In a dramatic twist to events the American giant asked for an extension to the June 28 deadline in order to conclude a farm-out with a third party described as “one of the largest oil and gas companies in the world”.

This request was rejected by Falcon, which means Hess forfeits its right to earn 62.5% in three Beetaloo permits, having invested an estimated US$80mln exploring the area.

Falcon gets to keep 100% of four permits in the basin in Australia’s Northern Territory, which the AIM and TSX-listed explorer says leaves it in a “stronger position going forward”.

Newtofo - I am repeating myself but Tamboran/BS, knowing about the ROFR. why would they ignore Falcon on this deal? Maybe they thought they will steamroll Falcon but then again what if that doesn't work - then what? Not the way I would have approached Falcon's 22.5% and ROFR. If Falcon succeeds in their financiering then Tamboran/Sheffield will be coming to Falcon with hat in hand. Will they work out a negotiated deal - probably IMO - but knowing Philip he is one hot/mad Irishman. I have heard he can be as tough and ruthless as they come - the guy knows how to play hardball. Mild mannered POQ has another side that will come out if he senses he has gained the upper hand. Interesting times ahead.

Newtofo: It sure took dprussky a long tiime to figure me out :^) It was a good run these last 10 years while it lasted!

Guernica - Interesting point and probably correct. We are not privy to the Right of Refusal contract clause. A contact requested that ROFR from Falcon/Tamboran but was told it was not public information - probably because it is part of the Origin contract which has not publicly been disclosed. What officially triggers that right and when it has to be funded would very likely be different dates.

Newtofo: I don't doubt that those wells have to be drilled - I have that on good sources. Its the exact timeline we do not understand and I'm sure that is defined in the permits. Falcon could pull a Tamboran Maverick style move and just drill the vertical wells and drill the horizontals and frack later - Riddle indicated that the Maverick well was vertically drilled to meet the gov drilling requirements and that it would be horizontally drilled/fracked next year - once again to meet the government drilling requirements.

IMO, one much more likely scenario is that there is a negotiated settlement to all this mess. As I have mentioned, Falcon holds a big point of leverage with its first right of refusal - this is why I don't understand why Falcon was ignored in all these negotiations. This Origin deal is a have to have situation for Tamboran and a nice to have situation for Falcon - that FROR can be used to gain concessions from Tamboran and at the end of the day everyone walks away happy. The Beetaloo is such a huge area that there is plenty for everyone. Will cooler heads prevail - time will tell.