Member Info for WetWater

OTD2000: POQ has indicated it will take 30-45 days to drill/case the well and about the same 30-45 days to frack. I am hoping that the drilling will be towards the lower estimated time allotment since the Kyalla will be a shallower well and the Kyalla shale sits on top of the Moroak sandstone which it a hard formation that takes time to drill through. The 30-45 days to frack is also a bit of an unknown. From what I understand the lateral length of this well is somewhat flexible - I took that to mean it just depends on what they run into - seems I read somewhere (EMP?) that they are planning up to 20 frack stages. The weather will not be much of a factor as to the testing of the well. Personal can be flown in every couple of days to check pressures, etc. The short answer to your question is to look for the results of the Kyalla test to be released prior to the end of the year.
I think the stock price is just reflecting the fact this well is a bit of an unknown - Origin/Falcon have high hopes for this well but remember that the Kyalla has never been fracked so it will certainly be a learning experience.

Thanks for concern - I am out of the area today but keeping up with the news. It’s another horrific action by a disturbed individual. Seems we in the states are witnessing far too much of this lately.

I hope you’re wrong also. It’s all about the presentation of AFEs and escalating drilling cost for the three year moratorium but I wouldn’t expect you to understand that.

Are you still in the no drilling camp for the 2019 season? - just wondering how you square that with Origin’s drilling in September statement. I must say you do have your convictions - even if it is to a fault :^)

I wanted to add that this does not mean Falcon will never need another raise. If the appraisal and sale of Falcon's interest flows over into the 2021 season and Origin decides to drill another well prior to Falcon's exit then POQ could be put in a position of raising funds for Falcon's participation in such a well. At this point in time that would mean that the 2020 wells proved commerciality and Falcon's stock price would be much higher than it is today. Funding is not an issues anytime in the near future.

I'm sure to the dismay of Namu and others who insist that Falcon is going to have to raise more funds in March 2020 here is an article that appeared on Proactive Investor. Don't forget that Falcon is carried for the next 4 wells. The $14.5 million should easily cover the cost of any original AFE overruns. Certainly another raise in the first part of 2020 is not in the cards.

Falcon Oil & Gas highlights ‘strong financial position’ ahead of new shale drilling
The explorer has US$14.5mln of cash ahead of a new appraisal well, due to be drilled next month.

Falcon Oil & Gas Ltd - Falcon Oil & Gas highlights ‘strong financial position’ ahead of new shale drilling
Falcon Oil & Gas Ltd (LON:FOG) (CVE:FO) has highlighted a ‘strong financial position’ as the company and its investors look forward to a new programme of drilling at the Beetaloo shale project in Australia.

The explorer, in a brief stockmarket statement, the company noted the filing of its interim financial results and said that at the end of June it had US$14.5mln of cash.

It also highlighted a continued focus on strict cost management and efficient operation of the portfolio.

Earlier this month, Falcon announced that it had received the environmental green light for the proposed appraisal well at Beetaloo. The proposed well, due to spud in September, will target the Kyalla shale liquids rich gas fairway.

The environmental management plan (EMP) has been approved by the Northern Territory Department of Environment and Natural Resources, the explorer said in a statement.

“Today’s announcement relating to the approval of the Kyalla 117 N2 Well EMP targeting the Kyalla shale liquids rich gas fairway is an exciting development for Falcon shareholders,” chief executive Philip O’Quigley said on 22 August.

“We look forward to the commencement of drilling operations.”

It's just been too quiet around here lately so I thought I would stir the pot a little for several of our POQ fans. :^) This appeared in Yahoo Finance.

How Does Philip O'Quigley's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Falcon Oil & Gas Ltd. has a market cap of CA$216m, and is paying total annual CEO compensation of US$685k. (This number is for the twelve months until December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$420k. We examined companies with market caps from US$100m to US$400m, and discovered that the median CEO total compensation of that group was US$679k.

So Philip O'Quigley is paid around the average of the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.

Schlemiel: Sorry to have to point it out but you left off the last 'sit and wait' :^)
I will be curious to see how the 2021 sell works out. Is it done in conjunction with Origin's reduction of ownership. Is the Beetaloo broken up into pieces and sold - That would be cumbersome with Falcon wanting to sell all of their 30% undivided interest. The Beetaloo is so large that at some point, IMO, it will have to be broken up into seperate holdings or developed under some type of consortium or multiple farm-out arrangements - it's just far too much acreage for a limited number of companies to develop. Assuming commerciality and with the aerial extent of the Velkerri B shale it looks like much of the 4.6 million acres will in be developed. By the time things gets to that point Falcon will have flown the coop.

Gee Guys - It's not all that bleak out here in the PB. I think the article took a very sensational approach to the Permian Basin. We do have our man camps, a 113F day yesterday, half open restaurants due to lack of help, $100,000 truck driver jobs, etc, etc. but all in all we're not all out in the middle of friggin desolate nowhere. What is true is the extreme growth in this area. This growth has resulted in the lowest unemployment rates in the state and pretty much in the US - if you want a job you can easily get one. This is what I have been preaching about the job potential that the NT is facing. I have to laugh when I see the NT environmentalist quoting their 600 new jobs figure. If the Beetaloo goes into commerciality one of the biggest issues I see is lack of available employees, housing, schools, etc, etc. The opportunities the Beetaloo will offer the NT will be mind boggling.

Right ow we just need to get this show on the road!!

Cont.................

Heather Wilson, a Jingulu elder from Elliott whose land the Origin well is planned for, said she was disgusted by the announcement.

"It shouldn't be happening at all because it will destroy our country," she said.

Environment and Natural Resources Minister Eva Lawler said: "Our environment is important and the Territory Labor Government understands that it is a large part of what makes living in the Northern Territory so special.

"As a Government, we are restoring trust and certainty through the implementation of a robust, clear and transparent set of rules and guidelines on how the environment must be protected - good environment policy is smart economic policy.

"Providing the community with a legislative right to have their say on an EMP relating to drilling or fracking is helping to restore trust and transparency - a process that did not exist under the previous CLP government."

The approved EMP was prepared with reference to the NT Petroleum (Environment) Regulations 2016 and the Code of Practice: Onshore Petroleum Activities in the Northern Territory.

The approved EMP and a statement of reasons for the decision can now be viewed at www.denr.nt.gov.au/onshore-gas.

AUGUST 22 2019 - 1:47PM
A second approval for fracking quickly follows the first

Chris McLennanChris McLennan
Local News
How Origin Energy says a drilling rig set up will look in the Beetaloo. Image: Origin Energy.
How Origin Energy says a drilling rig set up will look in the Beetaloo. Image: Origin Energy.
A second energy company has won NT Government permission to begin fracking for shale gas.

Origin Energy will follow Santos in resuming their exploration of the Beetaloo, again the Daly Waters region.

It is less than a month since the government approved Santos' application to continue exploratory drilling, in a similar area of the Beetaloo.

Both energy companies are confident there is a large gas resource many kilometres deep within the shales.

Origin and Santos first want to see how much gas is there, and then consider whether it makes economic sense to launch a whole new industry in the NT.

Origin today joined Santos in passing all the regulatory hurdles established since drilling was stopped in 2016.

Origin has received approval for the second Environmental Management Plan to be awarded for onshore shale gas exploration since the moratorium was lifted in early 2018.

Those opposed to fracking, led by Protect Country Alliance, said Origin's permission did not come from a public statement like Santos, which as first, but by a new addition to a government website.

The website lists the approval as having been granted more than a week ago.

Origin plans to drill, use "hydraulic fracture stimulation" and test its well on its mining lease country east of Daly Waters..

Protect Country Alliance spokesperson Graeme Sawyer said the majority of Territorians remained opposed to fracking, and for many, the fight was just beginning as the reality of rigs rolling into communities hits home.

Origin's Environment Management Plan for its Kyalla drilling project was approved on August 13, however only appeared on the government's EMP website today, the group claimed.

The government says the delay is an approved part of the notification process.

Con’t....................

Northern: Google Proactive Investor and Falcon. POQ addresses the timelines on these wells. I’m thinking sometime in late November for the Kyalla. - still up in the air if the Velkerri even gets drilled this year - that first well will be a vertical test so that will tell us something - if that looks good they will immediately follow with a lateral/casing - if it doesn’t look to hold potential the lateral drilling and casing funds will go to stage3 drilling next year.

Sandy: This next Kyalla well will be drilled as a horizontal well vs. the Velkerri well that will first be drilled as a vertical well which I assume will include a DFIT to give an indication of pressure, permeability and other things above my pay-grade.

There will be no downhole test prior to the fracking. The formation will probably not give up much of an indication prior to the frack - IMO at least nothing definitive. In the Permian Basin any horizontal well is going to be fracked - that’s the only way one can gain results - if you drill a horizontal you are committing to the whole fracking process. The Kyalla is probably the same - Origin is not going to know what they have until after the frack job and the well begins flowing back and unloading the frack fluids..

The Beetaloo W-1 gave Origin enough good data on the Kyalla shale that this next well is being called an appraisal well - Falcon and Origin have high hopes for the Kyalla but until the flow test they won’t fully know just how successful the well will be. It will be November - December before results are officially known.

Nanodarcy can give you a better idea of the process - maybe he will offer his expertise and comments as Origin permits Falcon to release news.

Newtofo: On the other hand maybe it is. I should have noticed that - to much brain overload today. ;^)

Newtofo: Thanks - relieved to see my senility is not kicking in!

Hmmmmm! Am I confused or has the Velkerri wet gas well been moved? I could have sworn that the Velkerri wet gas well was staked on the south-west portion of the Beetaloo. I noticed on slide #38 that it now appears on the northern boundary of the Beetaloo. Either I have just missed something or the well was moved to sidestep the Blundy issue.

Can someone tell me if that well has always been staked up north - I’m on the road this week and don’t have access to my office files.

Thanks

Thanks guys. I don’t think there was much clarity in saying FY 2020 but I feel pretty confident they will begin drilling this year and then we will see how far they can get. I haven’t gone back and looked at slide #38 but I was told once that #1- there is no predetermined lateral length going into drilling - guess they just see what kind of issues they run into. #2 I also suspect there is no magical number of days for the flow test. The Amungee flow test was 57 days - Origin just wants to measures, liquids, content, pressures and other things I was never taught in Geology 101.

I did pick up in the presentation that Frank made it a point to mention they were concentrating on liquids for stage2 drilling which is just another way of saying the Kyalla and Velkerri.

Anyway, no bad news given so I will put back on my Rose colored glasses. Looks like we have lost BO and I suspect we can send Namu a Godspeed card to were ever his next destination might be- if he decides to hang with us I am good as we will all be headed in a path forward for a change.
GLA

OrsonM: Thanks for your comment and insight. I watched the Origin call and have a question - did I miss the comment regarding drilling two wells in 2019. All I recall is the slide and comments showing the plans for drilling and testing two horizontal wells in FY2020 - that means either this year or prior to July 2020. I am the one still very positive for this year so I’m not questioning drilling soon - I just didn’t think I heard anything specifically clarifying this year.

Great news on the EMP - good call! I take it that approval of this drilling EMP is the same as receiving the long awaited permit? IMO we should be hearing something soon on rig movement. Hopefully the dark clouds will soon disappear.

GLA

Thanks Rich: I’m going to try to access. Volume on FOLGF was only 278K - only about $44,000 in stock - tiny amount for all the dark predictions. I’m still very positive and think all is well. If Origin is nixing the 2019 drilling program I guess we shall see here in just a few minutes. If I can get into the call I will let you know how this plays out.

Namu: I can’t seem to gain access information to the Origin call. Looking forward to you or someone else reporting back if there is any announcement or clarification on the Beetaloo program. I am still hearing nothing has changed but if in fact it has I suspect it will be addressed in the call.

The NT Government needs to get off their butt and give the Kyalla a stamp of approval. I for one can’t fathom why it would take this long to issue the permit. IMO at this point it is out of the control of Falcon as well as Origin. Just damn frustrating!!

Thanks

Oh my - the black clouds have drifted in. Didn’t know that Origin had a call tomorrow - looking forward to Namu reporting what Origin’s drilling plans are for this season. I’m sure he will be eager to report back to the board one way or the other.