Member Info for WetWater

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.

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 to be a pessimist but hopefully 2020 will not be looked back on as the “f**cking good old days” :^) :^)

May the Kyalla #117 kick-start 2021.

GLA

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.