Member Info for WetWater

Origin789: Yes the share price was addressed. Two things - POQ was surprised at the price action after the moratorium. He said it matched the price action after the Origin deal was announced which was also down - I think his comments were he could not figure out the stock market’s action to what should he perceived to be good news for Falcon.

I have posted before: at the AGM, either before or after the meeting (sorry), that POQ indicated he did not want to stir up much interest in Falcon prior to the end of the 2019 drilling program - in fact he is “holding his breath” that Falcon does not get any lowball offer because legally he would be required to present any material offer to the board and stockholders - he is afraid one might be tendered prior to the true value of Falcon being known. I know the example of a lowball offer being .75 - $1.00 share was mentioned. He wants to put off any offers as long as possible - ideally until after the 2020 drilling season but at the very least beyond the 2019 drilling season. I agree with this approach as the value will come in time - its what Falcon sells for that is important - not the current stock price.

For those that would like to keep things in perspective and not take things out of context here is the source of BO's quote.

Former Darwin mayor Graeme Sawyer, who is now co-ordinator of newly formed green group Protect Country Alliance said it was “madness” for the NT Government to support fossil fuels.

What would one expect of the co-ordinator of the newly formed Greeny Club. If this guy wasn't predicting years of litigation and environmental holdups then he might find himself out of a job.

Some people will use any source to try to prove their point.

Sounds like this board could have written this article!

NT budget fix banks on shale gas bonanza
Chris McLennan

Shale rocks like this one from the Beetaloo basin are vital to the NT Government's financial future.

The Northern Territory is banking on the development on a shale gas industry to restore the Government’s fortunes.

A gloomy independent report on the NT Government’s budget today said change was needed before debt spiralled out of control.

The Government appointed experts said a new strategy was needed to return the NT budget to a sustainable position.

Their interim report highlights the budget pain caused by GST reductions of $500 million per annum and the increased demand on government services.

The biggest blow of all was the wind down of the INPEX construction project.

The experts also said the Government strategy “assumed stronger payroll tax, stamp duty on conveyances and mining royalty revenue over the projection period, reflecting an expected economic recovery driven by an expanded onshore gas industry”.

The government this year abandoned its moratorium on the controversial use of fracking to extract gas deep in shale rocks.

Gas companies are already preparing new drilling in the new year in the Beetaloo basin south of Katherine.

The experts said their examination of the government’s plans showed it was rely on a medium term turnaround – from 2022-23 – “reflecting an expected economic recovery driven by an expanded on shore gas industry”.

Combined, these mounting pressures are pushing the Territory budget to unsustainable levels and revision of the Governments fiscal strategy is needed.

The interim report highlights the need for government, the public sector and the broader community to work together to exercise expenditure restraint and implement significant whole of government reform to keep budget pressure under control.

Territorians are invited to have their say on the interim report and contribute to priority actions, which will inform a final report to government in the lead up to the May 2019 budget.

For more information, or to have your say visit: www.treasury.nt.gov.au

Treasurer Nicole Manison said: “Times have never been tougher and we know that many Territory families and businesses continue to do it tough after four years of CLP chaos.

“But the future is bright and the Government’s priority remains on creating jobs and making every dollar count given we are facing enormous fiscal challenges.

“Unlike the former chaotic CLP government - who failed to plan for the Inpex construction wind down and who cut vital frontline services, hiked power prices by 30% and who sold off government assets - we will take an informed approach overseen by expert advice.

“I will be travelling interstate next week where I will be speaking with Federal Treasurer Josh Frydenberg and shadow Treasurer Chris Bowen about the Territory budget and getting a better deal for the NT

Hey guys - The stars are aligning! Along with the inherited mess and the Fed cutback the 10% royalty producing onshore gas will ease the financial squeeze. In a few years, the booming shale gas production fields with al the associated jobs/benefits will bring much needed positive changes to the NT. Gunner understands the benefits associated with shale production and I am confident he will insure that the NT government keeps its promise to have all necessary regulations in place for the 2019 drilling season. He has made this promise to Origin, Santos, Jemena, etc.- the proverbial bit will hit the ground this coming April/May window. The industry will not be put off another year.

Whoops - That last post was directed at Newtofo - not Nano. Sorry Nan0 - Not trying to antagonize anyone.

Nano: Maybe someday but even at that point I would be reluctant to name names - especially on a public board. Also understand that by definition 90% success equals 10% failure. That 90% could be 70% in another's opinion - Don't get hung up on a specific number - my main point in this discussion is that Origin and Falcon are very confident on this next Kyalla HFT. Here is hoping that well lives up to their expectations.

By all means don't mortgage the house and children yet :^)

GLA

Nano - Let me first say I appreciate your technical expertise and always pay close attention to what you post.

As I posted, the 90% figure was not my opinion so please don't take this as me questioning you personally - I wouldn't/couldn't even start to assign any type of probability to the Kyalla. IMO a 90% figure sounds high - infield drilling doesn't get much higher than that. It was mentioned that Origin/Falcon understood much more than has been released regarding the Kyalla - to the degree that it was almost a certainty. - I guess time will tell.

You would be very surprised with the source of the 90% figure - You would even want to retract your lies and stupidity statement if you knew where it came from.

This same source assigned the 40% figure to the Velkerri wet gas play. That uncertainty fits in with the planning of the 2019 drilling program's secondary target of drilling a step-out to the Amungee well if the Velkerri wet gas VT doesn't look promising.

The Kyalla HFT could be a failure but let me assure you that Origin/Falcon are very confident on the success of this well. As to the source being 'plain wrong or outright lies' comment - Sorry my friend but as much as I respect your technical knowledge be assured you are out of your league with that comment.

Newtofo: Please understand the 90% figure is not my number. Let’s just say it comes from high up. I was told the Kyalla zone was very well understood. The rock characteristics (core samples) showed to be very frackable, the gas has been flared in amounts from the Beetaloo W-1 well that allows for extrapolation from a vertical test to a HFT. Origin believes they fully understand the Kayalla - thus the 90% certainty. That leaves 10% on the negative side but in this business a 90 certainty give me a pretty good feeling about the next upcoming well. You are correct that the big question surrounds producing commercial quantities - just know the 90% certainty is not MY estimate. We are down to about six months and counting.

If the 10% comes back to bite us on the butt and the Velkerri wet gas VT is a flop then the 2019 program still plans an Amungee Velkerri B step which ends on a positive note.

Newtofo: The 2019 drilling program is designed to end on a positive note. The company assigns about a 90% chance of a successful test of the Kyalla. - pretty solid odds. Then if the Velkerri wet gas play hits (only assigned about a 40% chance of success) Origin will have discovered a new valuable resource for the Beetaloo. If the Velkerri wet gas play doesn’t prove out then Origin will go back and drill a step out to the Amungee N1 well potentially doubling the contingent resources of the Velkerri B - your $1 value increases to $1.50 - $2.00 though IMO the market will not assign that value until commerciality is proven. POQ told us at the AGM that there would be many more smiles next year - I think we will all be pleased at the end of the 2019 drilling program.

Poods - For a change, look at the big picture and forget about Falcon's balance sheet and whether they have only two or three years of cash burn left. At the end of 2020, if Falcon has a 30% interest in 15TCF - 20TCF - 30TCF (pick your number) contingent resources/reserves there will be 2-3-4 or more major international companies looking/bidding for those assets. The appraisal and selling is estimated to take 6-9 months.

At that point no buyer cares a ratsass what Falcon's share price or financial statement looks like - they are not looking to be Falcon's partner, they don't care about Falcon's financial strength going forward or the number of shares outstanding - these companies will be competing against each other as to who can put their name on the Beetaloo title.

If between now and then Falcon needs extra funding to participate in additional drilling or to exercise ORI options then Falcon will issue additional stock or sell a portion of their 30% interest - the need for additional funds is not going to sneak up on the company - Falcon can/will anticipate cash flow requirements. Regardless of all you say about POQ he is a pretty good accountant and he indicates they have sufficient funds to carry themselves through this project. For all the people that have the gall and gumption to think they know better than management I say go out and get your own friggin international oil company to run and manage - I'm sure you could do much better at managing cash flow, promotion, negotiating JVs, fielding endless phone calls/emails on rs, etc.

As you said, If the resources/reserves are well proven then raising funds will not be an issue. If the Beetaloo proves to be a bust then we better all head to the house - raising additional funds will be the least of Falcon's problems. With 6.6TCF of contingent resources to date and a likely 13 - 15 TCF of contingent Velkerri B resources at the end of 2019 I think Falcon will be in good shape on any future fund raising endeavors.

Equity01: Regarding the next drilling date - Falcon has said that it anticipates the next well to be spudded in the April/May time period and as I have mentioned the results of that well should be known/released by July. I suspect the water well monitoring bores are on schedule as we speak. I believe it was OrsonModesto(?) who posted an article mentioning the permitting of 8 well bores that will be required for the 2019 drilling season. Gunner has assured the industry that the necessary regulations allowing for planning the 2019 drilling season will be completed by the end of December. IMO, everything is on track for drilling to begin on schedule.

As far as running out of cash before the bit hits the ground - that's just pure BS.

People keep wanting news and I understand that but repeating the same 'old' news time and again doesn't get you very far. When your not the operator you are limited on what you can say. POQ told me we would get tired of all the news released when this next season starts. As previously mentioned, these upcoming wells will be material news events for Falcon but not so much for Origin. That will give Falcon free reign to issue news on their timetable - they will not be required to follow the lead of Origin. When it comes time to assign a contingent resource figure then Origin will once again be in charge of that information as that will definately be a material event for them. The NT government requires a statement of discovery if such is made - that will assure us that we will know the big picture of the Kyalla probably by July.

GLA

Newtofo: You'll be selling yourself short if you sell you shares based on Falcon's share price prior to any offer being accepted. Whether the stock price is $2, $2.50, $3, etc. you best hold till the final offer as the sale price/share will exceed any speculative price put on the stock prior to that announcement. All investors have their own timetables/goals but Falcon's worth at the end of the day is what the majors will competitively bid/pay for 30% of this world class discovery - not the price the penny stock market assigns to this stock.

At the AGM, POQ is on record as saying that we will know the results from the Lower Kyalla by about July - this HFT could be the catalyst for the next paradigm shift in the value of the Beetaloo. If the Kyalla HFT meets Origin's expectations and the stock price doesn't respond then I'm mortgaging the wife, dog, etc. for another round of Falcon stock.

hits the ground

" With indications that the shale gas reservoirs in the Beetaloo Sub-basin are of global significance..." Not just significant to the NT or to Australia but significant GLOBALLY. We knew it was big but nice to see defined in this manner. Six months and counting.......

A strengthened regulatory regime for the onshore gas industry

The Northern Territory Government is committed to developing a transparent, accountable onshore gas industry that will create jobs for Territorians while protecting our environment.

With indications that the shale gas reservoirs in the Beetaloo Sub-basin are of global significance, it is important that we enable this substantial industry to expand in a well-regulated and planned manner from the outset. Two legislative amendment bills were passed in Parliament last week. This is in response to government’s commitment to implement all of the recommendations outlined in the Final Report from the Scientific Inquiry into Hydraulic Fracturing in the Northern Territory.

Legislative amendments to date include;
Water Legislation Amendment Bill passed through Parliament that will ensure that the requirement for water licensing and permits to access water resources will apply to mining and petroleum activities; along with updating offences and penalties (Recommendation 7.1);
Passing of the Environment Protection Authority Amendment Bill, providing the Northern Territory Environment Protection Authority (NTEPA) additional members with specialist skills and experience in the assessment and management of the environmental impacts of onshore gas development, positioned to deliver independent expert advice to the Minister for Environment to inform decision making (Recommendation 14.34).
Introduced the Petroleum Legislation Amendment Bill with amendments to ensure petroleum companies, as applicants, are ‘fit and proper’ to hold exploration permits.......
.....A strengthened regulatory regime will ensure robust decision making by the government and provides Industry with certainty about their proposed work plans. Further regulatory changes are progressing and will be introduced to parliament for consideration in the coming months.

In addition to the legislative changes above, two Industry proponents have had Environment Management Plans approved by the Minister for Primary Industry and Resources to install groundwater monitoring bores in the Beetaloo Sub-basin. Origin and Santos plan to install monitoring bores in close proximity to proposed exploration sites to enable collection of baseline groundwater data, as required under recommendation 7.11 of the Final Report. Six months of groundwater data is a prerequisite for future activities at these sites. You can view the environment management plan

Poods: I put a lot of credence in what I heard about our post moratorium seller having to reverse those illegal sells by putting together some block trades. Just the fact that the constant pressure is off the stock has got to help. There were likely million(s) of Falcon shares sold though I never was given an amount. Sorry but I still can't disclose the details but it's nice to see you think the bid strengthening on the stock - I haven't been a buyer recently so don't have an opinion.

Another article on the water monitoring bores. Also note the new name assigned to the Amungee NW-1

Gas companies to start drilling water test bores in Beetaloo
Chris McLennan
Local News
Origin already claims to have found shale gas 2.4km down after fracking at this Amungee site near Daly Waters, before the moratorium on exploration was applied. Picture: supplied.
Origin already claims to have found shale gas 2.4km down after fracking at this Amungee site near Daly Waters, before the moratorium on exploration was applied. Picture: supplied.
Origin and Santos have received NT Government approval to install groundwater monitoring bores near potential exploration sites in the Beetaloo Sub-Basin.

The companies have revealed their first targets for shale gas exploration are both east of Daly Waters.

Six months of baseline groundwater data is needed before well drilling and the controversial practice of fracking can begin to extract shale gas there.

The companies will be required to provide laboratory reports to the NT Government and the data will be published online, the government said yesterday.

The Environment Management Plans for the groundwater monitoring bores are available on the Department of Primary Industry and Resources website here.

Approval has not been sought or given for any petroleum well drilling or hydraulic fracturing.

“The Environmental Management Plan covers a series of low impact activities proposed to expand Origin’s existing, four-year, baseline groundwater monitoring program in preparation for its’ 2019 exploration program,” Origin said in its now approved application.

Origin plans to drill two bores on its lease areas adjacent to the existing Velkerri N1-1 lease (formerly referred to as Amungee NW-1) near Daly Waters.

The Amungee shale gas exploration well.
The Amungee shale gas exploration well.

“In some instances, the proposed monitoring bores may be converted to a water supply bore for future drilling and stimulation activities,” Origin says.

Santos is the operator of exploration permit (EP) 161 about 350km south-east of Katherine.

Santos plans to drill up to two bores at Tanumbirini 1 Well which was drilled in 2014 and later cased – again located east of Daly Waters.

“Santos wishes to undertake preexploration activities (enabling activities) in 2018 to allow the 2019 program of works to proceed ...” the company says.

Camelot: We can't expect Cenkos to be issuing research on the Beetaloo. It was presented to me that their purpose is to introduce Falcon to their base of very high quality London institutional investors. They have a very well respected track record with these clients - Falcon hopes to use Cenkos' contacts as a source of potential institutional investors. I guess you could say Cenkos primary purpose is to make high quality recommendations to their clients and Falcon will be one of those investment opportunities.

I'm sure Cenkos will generate some type of introductory material on Falcon so that POQ can get his foot in the door to these groups but that will just be internal presentation material - a recap of what we know. It will take 6 - 9 months for these relationships to mature and IMO Falcon wants this incubation period to coincide with the 2019 drilling program completion.

If each well requires 2 bores and there are possibly 4 different well locations then you would need 8 permitted well bore sites.

The first Kyalla HFT = 2 bores
The Velkerri wet gas Vertical Test = 2 bores
A possible Velkerri HFT = 2 bores
If Velkerri wet gas Vertical Test doesn't pan out then the Amungee step out = 2 bores

The Oct 3rd date ties back into what POQ said would be the completion date - he said all test (including extended flow test) would be completed by the end of October with full results know by the Nov 2019 AGM.

As of the AGM, POQ was reporting that the drilling is on schedule for April/May timeframe. The NT's plan is to have all the initial 35 regulations required for appraisal drilling in place by the end of the year. I suspect that if the government wasn't going to meet this schedule then Falcon/Origin would not be giving out the April/May start date. IMO we may be overthinking this press release. Gunner's pressing hard to meet his promises to have this done by year end - IMO everything will run on the planned schedule.

Here is a short piece on an acquaintance of mine. He has had an up and down financial history in the Permian Basin as have many in the oil business. Autry Stephens and his family own Endeavor Energy outright – at 80 I am surprised he wouldn’t take the money and run but there is a potential of Endeavor doing an IPO. Not a bad payday either way on 329,000 acres of land. Maybe Falcon can get 20% - 30% of that on 4.6 million acres!

Notice in the article that Exxon and Chevron are mentioned as potential buyers - it will take deep pockets for a company to step and buy Falcon's interest and undertake exploration in the Beetaloo. With a market cap of $326 billion Exxon could easily afford the purchase as could Chevron with a cap of $220 billion. I don't know how Australia would fit into their portfolios.If not Exxon/Chevron then others will also be stepping forward in the pursuit of Falcon's interest.

https://www.msn.com/en-us/money/companies/reality-star-in-texas-poised-to-become-america%E2%80%99s-richest-oil-mogul/ar-BBQ9N1L?ocid=se

Awaiting proceeds from a land sale. Will be buying more when funding is received. You are right - nothing has changed except we are getting closer to the 2019 drilling season.