Member Info for WetWater

BO: I agree with most of Pood's statement. There is nothing definitive for him to say - It's as simple as that. As far as Ensign's Rig 963 - it is still in the Perth rig yard and is going to stay in Perth until Origin get its hands on the NT permit - I have been told Origin WILL NOT order the rig until they have the green light. Nothing POQ can say or do is going to going to change when Origin gets that permit and for that matter there is nothing Origin can say or do to speed up the NT's issuance of that required permit.

POQ's statement on drilling two wells this year is Origin's current stated position - It will stay the official position until Origin releases news otherwise - Once again it's not POQ's news to issue or change - I keep repeating this but it seems you and some others have a hard time grasping the concept - Falcon is a non-operating JV partner - They have farmed this project out to Origin. It is totally Origin's operations at this point - Falcon will make no comments regarding Origin's operations without Origin's prior consent. The SC lawsuit is between Origin and Blundy - it is not Falcon's place to comment on that Blundy lawsuit.

Falcon does have the OK to issue news releases on the Kyalla and Velkerri shale. These wells are material to Falcon's shareholders but not so much to Origin's shareholders. Falcon will be given updates from Origin and from what POQ has said will be issued as news releases to the Falcon shareholders. POQ promised us these releases and I suspect they will be issued when Origin finally gets about drilling this season.

You can bellyache about the lack of Falcon's news releases concerning Beetaloo operations all you want - it just indicates your lack understanding as to how a farm-out works - For now the Beetaloo is an Origin project - period! If you don't like the lack of news complain to Origin - I doubt it will do any good but have at it.

Desperate people make desperate statements. I can't see how his comments play well with the SC Judge. The pastoralist have the sweetest deal out there - an ongoing unexpiring lease - and now they are threatening the NT and even the Native title holders that are set to benefit from the development of the Beetaloo. The NTCA appears to be taking a radical turn from their conservative roots.

" unless it is done properly we will be torpedoing any hopes of success"

IMO the NTCA is entitled to some type of nuisance fee for giving access but this is not the way to go about it. They appear to have huge $$$$ signs in their eyes and I expect their expectations of ripping off the oil & gas industry are going to fall far short. They will eventually gain many side benefits such as all weather roads, supply shops, service outlets, etc., etc. Doesn't pay to be too greedy Ashley!

cont. ...........................

This is despite pastoralists in the NT having one of the most reasonably secure forms of land tenure.

In the Territory our leases are perpetual. This means they don’t expire like they do in other parts of Australia and are a “forever” type of land tenure subject to the leaseholder meeting their lease obligations. We are not aware of a lease being taken back.

But at this point in the onshore gas development the pastoralist land holder is the last person being considered. In the scientific inquiry into onshore gas Justice Rachel Pepper rightly identified a need for legislated land access agreements.

A piece of legislation which would set out the provisions and eventually the compensation for detriment associated to having resources companies and the side effects involved with them entering their properties including leaving gates open, road degradation and weed controls to name a few.

In a twist of timing Justice Pepper felt this was a Stage Two matter.

The Northern Territory government has announced that it will lift a ban on the controversial practice of gas fracking, b...
The problem with that is that gas companies, and a government keen to demonstrate that after 18-months of economic limbo and three years of economic decline, they are “getting on with the job” of creating jobs are now moving to accelerate what has been delayed and it is going to come at the expense of pastoralists.

Never mind in any of this that the economic foundation of the Territory economy, the cattle industry, is in fact the only piece of “black ink” in an otherwise Budget balance sheet filled with “red ink”; never mind that the landholders with their perpetual leases are actually operating a business which drives a $1.2 billion annual investment and will look at doubling its value by 2030.

Our cattle forms part of the key nutrition balance in South East Asia predominantly in our nearest neighbour Indonesia where millions of Indonesians consume NT beef on a yearly basis.

NTCA members are watching what happens in the Amungee versus Origin matter regardless of who wins the case. The gas industry waxed lyrical during the moratorium at how it would be respectful and treat landholders and Territorians.

Yet we have a situation where they are showing outright contempt for a landholder ahead of a court hearing by starting work instead of sitting down and talking. So, imagine the contempt they will show for those landholders without the resources to challenge their view of the world through the court system?

This demonstrates that a few branded lures and footballs given away at shows and public speaking engagements where they promise to be different to others who have come before them is a nonsense.

It can take a lifetime to earn trust, but it can be lost in a minute.

Ashley Manicaros is the chief executive officer of the Northern Territory Cattlemen’s Association

NT cattlemen watching Amungee versus Origin court case closely
THE NT has an opportunity to establish its economic future with a broad economic base but unless it is done properly we will be torpedoing any hopes of success, warns the NT Cattlemen’s Association

ASHLEY MANICAROS, OPINION, NT News
August 13, 2019 11:14pm
THE Northern Territory has an opportunity to establish its economic future with a broad economic base but unless it is done properly with mutual respect then we will be torpedoing any hopes of success, warns the Chief Executive Officer of the Northern Territory Cattlemen’s Association, Ashley Manicaros.

LAST week a court case which captures the essence of both opportunity and respect appeared briefly in the Northern Territory Supreme Court.

The case is between Bullwaddy which owns and operates Amungee Station and Origin Energy. It will either be one of a few future cases as ground rules are established, or it will be the forerunner to many of its kind - creating frustration for pastoralists and resources companies alike and leaving government looking inept for its failure to deliver on robust regulatory legislation on coexistence between land owners and resource companies.

The matter before the court is land access so Origin could complete exploration to determine the case for onshore gas production. Amungee asked for an injunction because it disputed claims there had been proper “stakeholder engagement”.

Origin Energy argued there had been and that any delays would be a disadvantage to them and Native Title holders who are receiving a royalty based around the work being completed.

Justice Stephen Southwood who heard the Amungee matter did not issue an injunction as
Amungee did not give undertakings as to damages. Why would they when it exposed the landholder to unnecessary financial impact?

Instead Justice Southwood set down a hearing for later next month where the key issue of “stakeholder engagement” not being addressed by Origin. Did it occur? And if it did what does that look like? And if it didn’t what should it look like?

Disputes over land access have been an issue for pastoralists in the Territory since self-government and of all the landholders in Australia, Territory pastoralists have the least amount of rights supported by legislation when it comes to controlling access and compensation for impacts.

cont.....................

BO: They have a lot of history with the Kyalla. There have been several other vertical test wells over many years so I don't think Origin is in for any surprises. The Kyalla is a shale play and is not going to flow freely - it will require extensive fracking. The big question is just how successful will that fracking be. We shall soon know.

What zone are you referring to that has all this high pressure gas? - something shallower than the Kyalla?

Bouggie: IMO we will be looking at more like > CAD$2.00. I was never clear on the UBS report as to how they were specifically valuing the Beetaloo. Falcon has been valued at .37 usd by RBC and .42 usd by Davy. Those figures are based on the Vekkerri B 2C resource which currently carries a 50% risking. The wet gas potential of the Kyalla/Velkerri on these next two wells could very well make for stacked plays carrying a greater value for large areas of the Beetaloo. For simplicity's sake, let's assume both of the scheduled 2019 wells are dry holes - then in 2020 Origin will move back up to the Velkerri B area. Based on seismic and vertical well test and the aerial extent of the Velkerri B one can be reasonably sure that with the two remaining commercial wells that would be drilled - Origin could very possibly prove up an additional 12 - 15 Tcf of gas. In my thinking at this point the average .40 usd 50% risked price goes to .40 X 3 or $1.20/share. Once commerciality is claimed you can de-risk the 1.20 to come up with somewhere around 2.50/share (not sure of the risking at that point) Then depending on what we might discover this year, the price could be higher. As I have said before, lots of ifs, ands and buts such as to where the 2020 wells are drilled, the Santos' wells, but that's where I get my target of $2 - $3 share for Falcon. Of course is someone decides to give Falcon $3 - $4/share I will be glad to be proven wrong ;^)

I don't every recall seeing that Origin is wanting to 'take us out'. I forsee someone like Totale, INPEX or a potential consortium purchasing Falcon's interest and possibly at the same time purchasing or farming into Origin's 70%. All this could happen in the first quarter of 2021.

Bravo Born to Boogie: The shortages on the East Coast continue to get worse, the demand of Asia keeps ramping up with what is expected to be higher and higher commodity prices. We all saw the article the other day indicating INPEX is looking to build 4 more LNG trains to add to their current 2 in Darwin. Now Santos is looking to drill a Velkerri B well this year - if successful that helps prove up our Velkerri B acreage. The stars are lining up right before our eyes.

At last years AGM, the CEO indicated that the moratorium with its extended delay is playing right into Falcon's hands. The wait has been long and frustrating but at the end of the day it looks to be adding to the potential sale of Falcon's 30% interest.

Love the slide rule comment - that brings back memories :^)

Origin has said such in their original presentations to Pepper's panel. Once Origin begins developmental drilling they intend to build all weather roads and which will give them access to year round operations. This gets back to the 500 square km area they proposed around the Amungee well. That developmental drilling will have 16 wells per pad. As new pads are required (ideally about 3 - 4 miles apart) the all weather roads will be extended into the network of development.

You are right in that they are not going to spend that kind of money for what currently would be just a one well project.

Orson: I don't think there is any hard date that would stop operations - it's just that the rainy season technically starts November 1st so these companies plan accordingly. Actually the Amungee NW-1H well was drilled/cased in October-November - that well concluded on November 18th, 2015. At that point the well was suspended to await fracking in the 2016 season. There is no predetermined date that operations must cease but if the Kyalla spudding is pushed back to the middle of September then it would probably be the middle of October to the end of October before that well is finalized. With the Kyalla being shallower and not having to penetrate the Moroka sandstone maybe drilling would be faster and if all goes smoothly the rig could be released by the Middle of October.

If the Kyalla permit is issued this next week the Velkerri may be possible. If spudding of the Velkerri gets pushed past the middle of October or later I suspect it will have to wait till 2020. Either way I don't see the well being fracked until 2020. As the days tick off this next week or two the more it is looking like 2020.

I was once told that the Beetaloo rainy season was nothing like dealing with sub-zero temperatures or crazy high seas - it was "manageable" conditions. I took that to mean something like finishing the completion of the Amungee NW-1H well. I just don't think a well would be spudded looking into the face of muddy, nasty conditions. I think the main issue with the rainy season is not having all-weather roads - These wells take a constant stream of trucks to transfer people, deliver pipe, casing, equipment, etc. - it would take a fleet of bulldozers to keep the required trucks moving in and out with accompanying constant delays.

Coma: I was wrong in implying you would not see .28 until the last quarter - With a good Kyalla flow test ithe price should be much higher. Your .28 may happen when the well is spudded but I suspect that will be in September the way things are moving.

Coma: I think commencement by August 28th is cutting it pretty tight. The rig is still in Perth and will remain there until Origin has the permit in hand - they are not going to get stuck paying expensive standby rates. Once the rig is ordered I've heard it will take 10 to 14 days to get it on location.

I'm probably going to have Green and Namu chunking rocks at my crystal ball but I spent some time with the calendar today and IMO we can write off the Velkerri well this 2019 drilling season. I had hoped to at least get that well drilled and cased but here we sit Aug 9th with no permit and none in sight. That could change tomorrow but IMO we are still running short on time. Once we get the permit we are looking at approximately 2 weeks to acquire a rig. AT BEST that gives us around a September 1st spud date with 60 days before the projected Beetaloo wet season kicks off. If it takes 30 - 45 days to drill and case the Kyalla then we will likely be bumping up against the rainy season. We don't know the exact conditions for the Katherine area rainy season but it is projected to begin November 1st. If we get the permit pdq and Origin meets the lower end of that drilling window projection then they could squeeze in the Velkerri with no issues on the Kyalla but I suspect all the stars will not align perfectly and the Velkerri is not going to happen in 2019. That puts Origin drilling the Velkerri in May of 2020. Then there needs to be a quick evaluation the Velkerri well and plans laid for the following 2 full blown horizontal wells to prove commerciality for one of the three potential shale zones.

The good news is that the Kyalla well WILL be drilled this season - that one well could prove up the potential of a second production zone as valuable or even better than the Velkerri B - A good flow test will give Falcon a nice bump and we could see Coma's .28 price prediction but probably not until sometime in the last quarter of this year.

Yes Green - Still lots of potential in the Kyalla and 6.6 Tcf of proven contingent resources in the Amungee - Things are Good in the Land of Falcon.

Namu: Don't forget to pack a few extra pairs of underwear - you may be gone a very very long time :^)

Green: I'll Double Down on the Wowsers - Sometimes the crystal ball shines clearer than others. Enough said.

Hey Namu: I've been gazing upon my crystal ball and it offered a moment of clarity with an answer to my previous major concern.

Regarding the Kyalla drilling permit - it is just a matter of time. This is the first permit issued for an EMP that covers the new fracking regulations and being such the NT is making sure to cross all their 'T's and dotting their 'i's. There are no, repeat no issues regarding the Kyalla permit. The Blundy case has absolutely nothing to do with the Kyalla well. As soon as the permit is 'in-hand' the rig will be ordered and drilling will proceed THIS YEAR.
I wanted you to be the first to receive this news so that you have adequate time to pack your bags :^)

As we had pretty much discussed on this board, the Blundy case is no more than a pain in the butt for Origin. The judge denied the requested injunction and the case is set for September. The case regards the second EMP covering the civic work to be done on the pad site, pits, etc. One never wants to predict anything in the court system with certainty but from what I gather Origin is not overly concerned with this case. My concern is that the timing could potentially back up the Velkerri well to the extent that we end up with split seasons for drilling/casing and fracking - just as on the Amungee well.

The drilling/completion of the Velkerri well depends on two major factors at this point: 1) The September Blundy case and how long it drags out. If the judge give Blundy his day in court and sends his pastoralist butt packing then we are good. 2) The time it takes to drill/case the Kyalla well. If all goes smoothly that certainly is in our favor - if it runs out to the far end of the allocated window then at this late date that does not play well with the Velkerri well completion.

If one really wants to paint a picture of doom and gloom (Calling BO, Calling BO) then the Blundy case backs up the Velkerri well to the point that it is not feasible to pay the very expense stand-by day rates and Origin releases the rig - this is just my opinion as I don't know diddly squat about the contract but at $50,000/day or thereabout Origin can't afford to wait too long for the clouds to clear. In that case we are going to have to hit the ground running next year with three scheduled wells.
BO - Hopefully things don't come to this but I wanted to point this scenario out for the pessimist of the board.

With that I put back on my rose colored glasses, cover my crystal ball and chill to the music of Ultra - All is good in the land of Falcon.

Namu:
It appears, as in the US, anyone can sue anybody for anything. Origin has a long history of dealing with the pastoralist. In Blundy's case there was a year or better of talks regarding the project and his lease. Origin has stated Blundy had no problems or concerns until the EMP for the water bore work was approved - then at the last minute, after sitting on his ass quitely for the last year or more all the sudden claims no one told him anything about what was going on with their drilling plans, water bores, weed control, etc, etc. - They just took advantage of him - Right!! His motive - throw a monkey wrench in the works at the last moment for maximum leverage on getting a monetary settlement for lease access for which he has no legal right. I suspect Origin has all the previous years negotiations/talks documented. Just because Origin doesn't have his written consent, which was never required anyway, does not play into his defense. He should have been in active negotiations with Origin over the last year or more if this was anything more than a money grab. I think the judges/court system see right through his motives of sitting behind the log until the last moment. My question - Does Blundy's Amungee Mungee lease have anything to do with the Kyalla well which has already been given EMP approval and just awaiting the final permit. Blundy's suit didn't seem to slow down Santos and I don't think it plays into Origin's Kyalla well but then that's just my opinion. Bye the way, I wouldn't put much credence in what Ashley Manicaros says - the fact that he represents the NTCA might make him just a little biased - The NTCA is obviously pushing this legal challenge - it means a lot of money for its membership.

If Origin would just make a simple statement that the Kyalla HFT is on schedule that would go a long way to calming a lot of nerves.
.......................
"Supreme Court Justice Steven Southwood, while not agreeing to an injunction being sought by the operators of Amungee Station in the Beetaloo Basin, found there were "serious trial-able issues" to determine whether or not Origin carried out stakeholder engagement

The court action also seeks to discover whether or not Origin lodged an Environmental Management Plan in accordance with newly approved NT regulations.

"If Origin is found not to have carried out stakeholder engagement then it raises the question as to how the Minister could have approved the EMP to satisfy Regulation 9 and the schedules," NTCA chief executive Ashley Manicaros said.

"Stakeholder engagement is a matter for the Minister to consider before giving approvals."

Namu: I couldn't agree with you more on the lack of updates by Falcon or Origin if there is actually something to update. For all we know there are no issues and Origin is just waiting patiently (more so than us) for the NT to issue the permit. If no problems then there is nothing to update. The clock is ticking away and come September we will have a problem meeting the 2019 season - to me that is a material event that needs to be addressed when/if Origin reaches that magical date.

As far as to Falcon's stock price those of us that have been around for a time know that its movement is not reflective of any potential news, etc. I mentioned before that literally the day before the huge Amungee discovery announcement the stock had sunk to .05/share - the price was predicting a complete failure when just the opposite was true. The CEO once told me that when he announced the Origin farmout agreement, which he considered fantastic news, the stock price went down so go figure. How about after the moratorium was lifted the stock started moving down - this was before anyone predicted the Pepper fiasco. I think the penny aspect of this stock plays into this psychotic movement - Hey Poods - where is the reverse split when we need it :^)

I don't agree that the writing is on the wall at his point - Not to say someone doesn't have a spray can handy with an anxious trigger finger.

OrsonModesto: Thanks for your insight - Lawler's statements that the lawsuits have no bearing on the approval process of the EMP tells me what I need to know. I have heard that Origin thinks Blundy's suit was a piece of crap and after over a year of consultation with Blundy I'm pretty sure they feel like they have met any required consultation requirements. His suit was a last minute pile of crap to try to put pressure on Origin to cave and offer him some concessions - looks like the Blundy lawsuits aren't going anywhere.

Now where is that permit??

OrsonModesto - You're a champ - thanks for helping clarify these legal matters. Now you have to pay the price with an additional 100 questions :^)

So does the currently pending September case deal with the Velkerri EMP? I am assuming that case would have been filed against Origin and is the one basically requesting written permission (money) to enter his pastoral lease?

Was the injunction case filed against Eva Lawler, minister, when she approved the Velkerri civil EMP?

Bottom line - At this point do you think any Blundy's filings are impacting the Kyalla approval? It seems Blundy would have no standing in that EMP but then again if I understood NanoDarcy one of his suits may have to do more with the overall NT EMP due process procedures. Sorry for all the questions - just trying to determine if Blundy is holding Origin up on the Kyalla permit being issued. A little guidance from Origin would sure be helpful!

Thanks

Nano: OK - Thanks. You mentioned a subsequent case. Would that be a case outside of the Blundy case? It's all very confusing as Blundy lost in the lower courts and from what you indicated has since lost at the SC level. It was never clear to me if the Blundy case was suing Origin or the minister that was reviewing the Origin EMP. This is far outside of my paygrade (thank goodness) but if we are now awaiting another case to be ruled on that could be a timing problem. If you can clarify this in anyway I am sure many on this board would be interested.

I know an appraisal well is just that - my thoughts were it is beyond being just a test well - that was the Beetaloo W-1. It all means much of nothing until the flow test results are know.

Nano - thanks for clarifying. The results are not surprising - that was Origin’s thoughts when first filed.

Also nice to see the Kyalla classified as an appraisal well - Origin/Falcon have high hopes for Kyalla - lots of good data points on this shale.

Now if we can just get the permit issued and see what this yet to be fracked shale will provide - I’m pulling for the JV.