Member Info for WetWater

Sandydune/Newtofo:

The ballsy move by Origin to proceed with drilling the Amungee HFT knowing that the moratorium was bearing down on them may have well changed the direction of the onshore shale exploration - at least for the short and medium term horizons. As you guys stated, it resulted in Origin putting a spotlight on the 496 TCF of gas in place showing the Territory and in fact Australia the vast economic benefits of to be gained by allowing gas shale basins to be fracked.

In years to come, many jobs will be gained and fortunes made because of someone's brilliant decision proceed with that drilling permit and spud the well before the moratorium gates slammed shut. With the heavy drilling rigs and fracking equipment in mind that decision by the powers to be at Origin may well have been the butterfly effect to Australia's rise in energy self sufficiency and dominance.

I will add that individual(s) to my list of those things to be thankful for as I gobble down my turkey this Thanksgiving day!

Up until the time that Origin completes the next 5 wells there might well be some lowball offers for Falcon. If it is considered a material offer (say $1.00 currently) POQ would be required by law to present those offers to his board and the stockholders - that is his concern, as is ours at the moment, being Falcon doesn't want 'material' lowball offers tempting any current stockholders. This is one reason you don't see our CEO touting Falcon to the world - he doesn't want to generate any interest/offers until we complete more wells and get the share price up - he made this pretty clear at the AGM. Even then he doesn't want to entertain buyout offers until Falcon/Origin complete their appraisal stage drilling. Ideally he can stave off any serious offers until the next 5 wells or even ten wells might be drilled. At that point Falcon will have major companies competitively bidding for our acreage.

Some people seem to think Falcon's share price will play into this post appraisal bidding - I completely disagree. These big major companies will be bidding for appraised asset value of the proven reserves and contingent resources - what they bid will have absolutely nothing to do with the share price of Falcon. If Japan, China, Totale, Conocophillips, Exxon, etc. are bidding against each other for 30% of this world class asset then rest assured they are submitting bids which reflect their perceived value of Falcon's 30% of the Beetaloo - whether Falcon is .20 or 2.00/share at that point will have nothing to do with what they are willing to pay to have access to this world class field. Many factors will go into their bids but Falcon's share price will not be one of those factors. We WILL get a fair value for the Beetaloo - the competition of the bids will assure Falcon receives a good market value for their interest.

Now if only the market will finally begin to recognize what the Commonwealth and Territorial governments are beginning to tout! I feel that this train will soon be leaving the station - its about time after 2 long years!

We know it here on the board, but what was not stated was that the 18,500 square km mentioned in the article IS the Falcon acreage which computes out to about 18,600 sq km. The 500 TCF IS the Velkerri B and the wet gas liquid rich zones are the Kyalla and the Velkerri wet gas plays. This article has Falcon written all over it - if only POQ would help connect the dots!

Origin789 - I think I know what has caused the persistent drizzle you are seeing though I am not at liberty to disclose. If what I hear is correct then the cause of the persistent selling has been stopped - the resolution being the block trades we have been witnessing. I look for these block trades to continue and hopefully with the removal of the constant selling pressure Falcon's share price can stabilize and strengthen. Sorry for being so vague but it needs to be this way for now.

I realize I'm comparing Apples to Oranges but I wanted to give some people on this board the feeling for the size/value of the Falcon 's Beetaloo asset. The Permian Basin in West Texas is truly a world class shale OIL field. One must realize that oil is more valuable than gas but I still think you will find the following interesting:

Today in the local paper there is an article that Chevron, Exxon, Conoco Phillips amongst others will be in the bidding for Endeavor Energy - a large independent privately held company. Endeavor owns 329,000 acres of land of which only 2% is currently developed. Including debt, the bidding for Endeavor is expected to be in the $15B range - That my friends is $45,500/acre!

Realizing that gas is not oil and the infrastructure of the Beetaloo has not been built out, $45,500/acre makes one believe geting $2500 - $5500 per acre for our contingent gas resources is not such a stretch. If the Kyalla and/or the Velkerri wet gas plays are successful then it will be interesting to see what value someone like RBC would put on our acreage. With the potential stacked plays of the Beetaloo being compared to that of the Permian Basin then even our gas based resources might entertain some eye-popping offers. The next couple of years hold tremendous potential - here's dreaming!

Asia will drive the demand and development of the Beetaloo Basin. Interestingly, by 2040 China’s gas demand is expected to be 26,500 PJ of gas/year – coincidently by 2040 the Beetaloo Basin is projected to increase production to 28,700 PJ of gas/year. Demand in China will take all the projected gas production in the Beetaloo and that’s before one even considers the huge amount of gas required to support Japan’s planned expansion of its LNG trains. This ever growing demand out of Asia insures many companies will be positioning themselves as providers of the TCFs of gas necessary to feed Asia’s vast need of the NT’s unconventional gas resources. When it comes time to sell Falcon’s Beetaloo assets there will no shortage of companies bidding to get a piece of this World Class Gas Discovery.

Origin789: IMO your $5,500 could be high per acre for your calculations but then again that figure might be correct. The Balken as I recall ran from $2500 - $10,000/acre - in some areas more. I don't believe Falcon could sell all 1.38 million acres at that price. If the $5,500 figure is a good price then you might apply it to the current contingent resources acreage which is about 150,000 net acres. Of course the next step-out around the Amungee could prove up a total of say 13 - 15 TCF on (guessing) 300,000 acres. That potential contingent resource acreage would then be worth $1.6B. I am sure the remaining unappraised acreage will carry some value but nowhere near the contingent resources - I think Davy put that figure at $250/acre.

Then we have the potential Kyalla and Velkerri wet gas which could greatly add into the equation. With just 5 more wells Falcon is limited on what Origin can prove up with appraisal drilling. I personally am hoping for $2B to $3B on a sale. That is just my opinion and no more correct than your $5B. If Falcon stays in the game longer then you can see where that sales price goes up dramatically.

At one time I heard that people expecting $5+/share might be expecting too much. But then that was before we know the outcome of the Kyalla and Velkerri wet gas - those could add into the mix.

Either way, Falcon is a screaming buy right now IMO. It will be exciting to see Falcon's potential at the end of the 2019 season - As POQ said at the AGM - there will be lots of more smiles this time next year!

Looking back on my previous post concerning the Kyalla - when saying 'I was guessing' I was in fact repeating an estimated 90% chance of a successful Kyalla HFT and a 40% chance of a successful Valkerri wet gas vertical test this next drilling season. Notwithstanding Nano's comments, those estimates came from a reliable and knowledgeable source. The Kyalla HFT success rating was followed up with comments of all the vast amount of known data, flow rates, flaring, core analysis, seismic, etc. I came away with the impression that the Kyalla, though never previously horizontally fracked, was a well understood zone - more than just a run of the mill potential target. Origin has high expectations for this zone and as Dr. Close stated - If the Kyalla proves successful then the tens of trillions of TCF gas production would be constricted only by the ability to deliver the gas to market and not the actual reserves themselves (paraphrasing Dr.Closes's comments in the Matt Chambers article).

I also recall the AGES 2017 report stating that in 2011 the deepened Shenandoa well was frac stimulated. The article continued that 2 Velkerri zones and the Kyalla zone all were successfully flowed. I don't have the expertise to interpret that 'successfully flowed' statement but IMO the article sounded positive. In another article Origin stated that the Kyalla rock characteristics appeared to be positive for fracking - The article went on to explain those favorable characteristics - sorry but I cannot locate the source of that article at this time.

Additional data was gathered in the Beetaloo W-1 well - be assured the Kyalla was thoroughly evaluated/studied in this well. There is a very predictable reason the next Kyalla HFT will be in close proximity of the Beetaloo W-1.

As I mentioned before, nothing is 100% in this business but mainly I wanted to clarify two things: 1) The 90% figure was not just a WAG 2) Origin's expectations for the next Kyalla HFT are being given a very high probability of success. Hopefully Origin's expectations are met.

GLA

The 400 year's worth of gas was mentioned in the weeklytimesnow.com's Sept 2018 article so it is not breaking news.

Thanks Nano - I am not a geologist/geophysicist or the likes. Lets just say I am a parrot.

Newtofo: Your memory serves you well on the Shenandoah, the Beetaloo W-1 with regard to the Kyalla shale. There is a lot of data and knowledge obtained from core samples, flow test/flaring, seismic, etc. regarding the Kyalla shale. Nothing is 100% certain in this business but I'm guessing one could assign about a 90% chance of completing a successful Kyalla HFT on Origin's next well - it's about as close to a certainty as one can get. If it proves as successful as Origin/Dr.Close are thinking then it will be at least one of the two 2020 commerciality test wells. Depending on the Velkerri wet gas outcome, that shale could become the other 2020 well. If the Velkerri wet gas play is less than a complete success then as POQ stated the second 2019 HFT will be a step out to the Amungee Velkerri B dry gas proving up even more contingent resources (thinking 10 - 13 TCF total). Then, IMO, the Kyalla will be scheduled for both 2020 wells. As great as the Velkerri B discovery might be, the economics of the Kyalla could make it the primary target of the Beetaloo concession - that's Dr. Close's opinion. Also if the Kyalla meets expectations then proving up the commerciality of the Beetaloo just takes a huge step forward.

The previously mentioned thaw in diplomatic relations has not yet reached the approval stage of the APA Oil & Gas pipeline company 13bn bid by the Chinese controlled Hong Kong company.

Would a Hong Kong interest be allowed to bid on the Beetaloo - maybe not at this point but there is work currently underway to negotiate a free trade deal. I suspect the Chinese will still be a big buyer of Australian LNG.

Canberra to block $13bn China pipeline deal

PRIMROSE RIORDAN
POLITICAL REPORTER
@primroseriordan
PERRY WILLIAMS
SENIOR BUSINESS WRITER
@perrybwilliams ‏
12:00AM NOVEMBER 8, 2018
49 COMMENTS
Foreign Minister Marise Payne will be under pressure from Chinese officials in Beijing today after Josh Frydenberg moved to block on “national interest” grounds a Hong Kong-based company’s $13 billion bid for Australian critical infrastructure gas pipeline company APA.

The Coalition has also used an intervention by diplomats at the UN ahead of Senator Payne’s long-awaited visit to indirectly criticise China’s increasing contro­l over Hong Kong, saying it needed to maintain a “one country, two systems” framework.

In a move certain to raise concerns in Beijing, the Treasurer released his preliminary view yesterday that the bid for APA from CK Infrastructure would not be in the national interest because it would establish a dominant foreign player in the gas and electricity sectors.

More at link:

https://www.theaustralian.com.au/national-affairs/foreign-affairs/canberra-to-block-13bn-china-pipeline-deal/news-story/2360b01346dbcdd3d49eda4c9ffc012a?nk=e39d21e301b043f2f804082acda4bc47-1541626342

Newtofo: At the AGM, Phillip really tried to drive home the fact that as big a demand as we will see out of Japan for LNG, China's demand for LNG will far exceed Japan's. As China converts Oil fired generators to gas fired the demand will continue to grow at what could be a parabolic rate. Not only will that demand grow exponentially but that demand also will give strong support to the gas commodity pricing which is predicted to grow at a nice pace.

POQ mentioned the huge demand for TCF figures from every 1% switch by China from oil to gas fired plans. My impression at the AGM was there is no way the Beetaloo can meet those needs of China alone if they continue their planned conversions. The demand/market will be there when we put the Beetaloo on the block.

By the time 2020 comes around, POQ see all this demand driving multiple companies/countries into a bidding situation for Falcon's Beetaloo interest. We WILL get a fair price for Falcon's Beetaloo assets regardless of what the stock price is going into the sale. The timing of Falcon's projected sale has ironically been greatly enhanced by the NT's moratorium. The pent up demand for LNG in a couple of years will be multiplies of what it might have been today - Thank you NT!

Lets keep the LNG shipments flowing guys! - The Beetaloo has a boatload of gas to sell.

Foreign Minister Marise Payne to visit Beijing on Thursday

Marise Payne this week will ­become the first Australian ­foreign minister to visit China in almost three years, signalling a thaw in diplomatic relations as President Xi Jinping commits his country to opening up its economy.

China’s Foreign Ministry last night announced that Senator Payne had been invited for a two-day visit to ­Beijing, starting on Thursday, ­including talks with China’s Foreign Minister Wang Yi.

The visit — the first by an Australian foreign minister since Julie Bishop visited Beijing in February 2016 — marks a major upturn in Australia-China relations after more than a year of tensions that sparked fears they could harm Australia’s $150 billion-a-year trade with the world’s second-largest economy.

Foreign Ministry spokes­woman Hua Chunying said Senator Payne and Mr Wang met during a UN conference in New York in August and “exchanged opinions in depth”.

“They have reached an ­important consensus that the two countries should deepen co-­operation and promote relations based on mutual respect, equality and mutual benefit,” she said.

And So On and So Forth............

https://www.theaustralian.com.au/news/world/foreign-minister-marise-payne-to-visit-beijing-on-thursday/news-story/04247c96bedcf7dc9e95ac24751b6dc8?utm_source=The%20Australian&utm_medium=email&utm_campaign=editorial&utm_content=TodaySHeadlines&nk=e39d21e301b043f2f804082acda4bc47-1541457471

Eyedoc - I don't have any information on the Santos buyout. I would have thought those details would have become public by now but Origin has never disclosed. I have a strong feeling that POQ would be mum on the subject also.

I hold shares in multiple accounts at Fidelity. You just have to get approval for penny stocks ahead of time - otherwise you will have to deal with the 10,000 share limit. I have a couple of accounts I have been too lazy to get approved and I still have that limit to deal with. Sorry but I can't recall the exact approval process but a call to Fidelity should get you that answer - I don't remember it being difficult to get approval.

Maybe not as long as you think. At the AGM POQ explained the relationship with Cenkos - to establish some high quality institutional contacts in the London market. These institutional relationships take on average 6 - 9 months to mature. POQ ideally would like to have these relationships established prior to the 2019 drilling program. You do the math as to when these road shows begin.

We don't know when these institutional relationships become fruitful but I expect these road shows start generating some additional interest in the stock after the first of the year. Those attending the AGM heard POQ's compelling story to be presented to these future institutional owners. These guys will be given a heads-up becoming familiar with Falcon's story prior to the drilling season, then they will see that story coming to life in real time as the drilling season begins - IMO that should cause the stock to firm up and begin its upward move.

If anyone wants to pick up additional shares now would be the time. With the 2019 drilling season getting closer and closer I don't see much if any downside to the stock. All of course in my highly biased opinion! The moratorium been a bitch the last 1 1/2 - 2 years with lots of deadtime - worry over the lifting - no news on field development progress. Its been as tough and even tougher than I originally imagined but now that is behind us and before long Origin gets back to drilling. This is a pretty amazing story and its about to come back to life!

It will have been a couple of long cold winters but thank goodness the wait is coming to a close. Those looking for 13p, 10p or bankruptcy might find themselve left out in the cold.

GLA

VegasGal: SA was briefly mentioned. Looks like there is nothing to to be done for at least another year. POQ said something about legislation being sent back to be reworked. The short version is that nothing is going to happen until it makes sense for the oil and gas companies to invest their capital. The desire is there by SA - the terms at this point just don’t make sense for investing.

Ribbit: I am still traveling. Won’t be back into my office for another 4 days or so. If you have a throwaway email let me know. After the AGM I releaized I didn’t exchange emails with anyone - my mistake. I have an email I never use or check. Maybe when I get back home I can look that up and we can work something out. If that is not timely enough you’ll need to work out on your end. If you have a solution I am open to getting in touch.

Newtofo/Ultra: It was made clear at the AGM that Jemina was committed to expanding the southern pipeline and though I don’t recall a name, POQ made it clear that there is no question that the Northern Pipeline to Darwin will also be expanded. Both North and South pipeline companies already own the right of way so it’s just a matter of laying pipeline. It was made clear that China(Japan?) plans/needs 6 more LNG trains NOW! - the expanded Darwin pipeline is a given. Even 6 more LNG trains doesn’t make much of a dent in the future needs of China/Japan - Asia needs the Beetaloo gas in a huge way - NT gas is going to have a market for everything it can produce. ConocoPhillips and INPEX have spent 40 billion dollars on the current LNG complex. Another billion for a pipeline is not a hurdle with their current and future market demand.