Wentworth CEO sees both capital and dividend growth opportunities in Tanzania's Mnazi gas field Watch Now
What has Gabor done to impress me? I didn't say I was 'impressed' with Gabor - I said he plays, as geologist, an important part of the Origin Farm-Out. Someone questioned why he is even on staff - I went through that in my previous post. He seems like a nice enough guy - like most geologist we will know his true worth after the project is completed. I might add that Falcon has input into this farm-out but I suspect it is more a partnership than a dictatorship with Origin. :^)
Give POQ you input regarding your thoughts on the video conferencing - see what he thinks.
Many of the questions on this board don't interest me. I'm more interested in the drilling/success of the next four wells. Those are the biggest 'questions' that concern me in this investment. The answers to those questions will take time so I am quite comfortable in waiting and seeing them play out. Nothing we do here on this board is going to rush that process.
If it weren't winter (Christmas) I would be making the trip with you. Last year I worked in Scotland and London on my write-off vacation but then it was held in early November. This year I was looking at Munich and the Christmas markets but other things going on took precedence. Once this is over, assuming success, I'll join you in a celebration party - where ever that might be.
Of course most investors on this board are Falcon oriented. Being in the US I invest using FOLGF.
Poods: Ha - "Patience is a Virtue" should be the mission statement of any Falcon investor! Like you I hold a large percentage of my shares in a private foundation. At this stage of life the final outcome of Falcon is not going to change my living standards one way or the other. My primary goal in this investment is the ability to increase a foundation's annual stream of giving. My other primary interest is the number of investors I have personally involved with Falcon - I really want them to do well with this stock - its a sexy story I have sold to many. Of course I like be right/successful also!!
I'm guessing you and I are likely on the same page on many things - I may argue with you from time to time but it's all in good spirits - sometimes fun, sometimes frustrating. After this is all over and if this investment is successful it would be fun to meet many on this board - even you, BO and Namu (whoever he may be at that time) :^) May we both live long enough to see Falcon through to the end - at times I wonder.
Poods: Sorry guy but not going down this road again. I have told you what POQ's issues were with the RS - those issues are the same as mine. I'm not saying you are wrong - just that some of us do not agree with you. Falcon is going to sell the Beetaloo to the highest bidder whether there is a RS or not. The share price at the time of the sale will be immaterial. IMO if Falcon needs any additional funds to see itself through to the end game those will get raised in short order. Also IMO you are going to make money on this investment whether you like it or not :^)
Following are some cuts from an article in the Katherine Times.
NOVEMBER 12 2019 - 9:29AM
NT Government minister travels to America on oil and gas trip
Roxanne Fitzgerald - Katherine Times
Northern Territory Government delegates will head to America today to make a case for investment in the Territory's untapped oil and gas industry.
With the government facing an upcoming election and job opportunities at record lows, the race to turn the Territory around is on.
"Driving jobs and investment opportunities in the Territory is a major priority for this government," Minister for Infrastructure, Planning and Logistics, Eva Lawler said.
he will be joined by public servants and industry advisors on a nine day oil and gas infrastructure and digital investment attraction trip to the US with two things in mind: to strengthen international relationships and attract business to the Top End.
Discussions will be held with American industry about the opportunities and challenges relating to the onshore oil and gas industry in the Territory, with a strong focus on natural gas infrastructure planning, business attraction for natural gas-related petrochemical facilities, downstream gas processing and workforce planning for the industry.
The Minister will also visit an active well site, processing and fractionation facility, and a pipeline construction site.
BO: The board regularly utilizes video conferencing with its scheduled meetings. As with many AGMs there's just not much to be covered other than vote tallies. I'm sure if something meaty was on the agenda video conferencing would be facilitated. At last years meeting there were probably 3 of us who asked questions - mostly concerning the corporate presentation. Maybe '987' or whoever else attends can delve into the 'heavy' board directed question and report back.
I made the executive decision to take a pass this year - the timing with regards to the Christmas season wasn't a good fit this year.
Poods: Your right - I don't even want to rehash the reverse split, your lack of confidence of POQ or his excessive compensation package. For the sake of others less familiar with your disdain for Falcon, its board and POQ you might try to qualify many of your' factual' statements as "IMO".
Incidentally, with you statement " It is certainly easy to understand he gets bored doing so little; therefore, his interest in golf and drinking beer in the name of public relations." Curious - Do you even realize that POQ doesn't drink? Not even in the name of public relations so take that criticism off your list. He may play golf for public relations as many in executive leadership positions - if so good for him.
Good Grief Poods - For someone with such disdain for all the leadership/management of Falcon you still continue to buy stock - Amazing!
Poods: I don't know if you've been to a recent AGM. Last year was my first and I was surprised to there were no board members in attendance. When I cornered POQ later I asked him why that was and he said the board members are scattered throughout the world and the travel cost of gathering them would not be justified for such a short non-eventful meeting. - Buckeye - A fine example of Falcon conserving capital. All that occurred at the AGM was an announcement of vote tallies on the reelection of directors and 'other business'. If I remember correctly, after that 5 - 10 minute business meeting, the formal meeting was adjourned and was followed by the corporate presentation and then questions and answers of Philip/Gabor. My point being that there will not likely be any representative of the board in attendance to ask about POQ's 'excessive' compensation - I guess one could ask POQ or Gabor and see what kind of answer is given :^)
I think at this stage of the game you need to give it up on the 'excessive' compensation obsession. We are going into the final innings of Falcon and POQ's compensation, regardless of how one categorizes it, is not going to amount to a hill of beans on the final return to you and other stockholders - Of Course all IMO. I'm more concerned about the assets of the Kyalla, Velkerri wet or the Velkerri B and the final sell price.
Another answer for Buckeye you can cross off the list - Gabor is the geologist that works with Origin to determine well locations and how best to benefit from Origin's carry. Falcon doesn't have much say in the operations/drilling of these wells but they do have input as to where those wells are located etc. As an example, Gabor will be consulted after the Kyalla vertical TD on whether to drill the lateral or not. Gabor was consulted on the last stage 1 well that was cancelled and funds rolled into the stage 2 program. He will be consulted in which shale the stage 3 wells will target and where those wells are best staked. Gabor is still an important member of the Falcon team. I suspect he will be at the AGM to answer questions.
Buckeye - Cenkos and POQ have a very tight relationship. Cenkos is highly respected in the institutional investment players in London - they can open many doors for POQ and speak to Philip's character and leadership. That is how the infamous April raise came off so quickly and efficiently. RBC didn't do Falcon any favors. Their evaluation of Falcon was extremely conservative to a fault - at the time I remember making the comment that they couldn't see past the tip of their nose. I believe RBC was originally employed to help Falcon evaluate/price the Beetaloo for sale - after that 40+ page overly conservative report came out it was very apparent that these were not our boys.
Northern: Yes - I too am expecting releases at each stage - the first 'stage' could be when Origin TDs the vertical well and then elects(or not) to drill the horizontal portion. I am thinking we are no yet to that decision. The following stage I assume would be when the lateral is completed followed by the next stage of fracing completion and then putting the well on an EPT. The last release would be the flow test results. These stages are my assumptions but fall in line with the four or five releases we have been promised. Like you I tend to look for/want the news sooner rather than later.
Northern: I'm still thinking POQ makes an announcement when/if the horizontal leg is decided upon. We are now at about 30 days of drilling (well spudded on Oct 8th(?). I would have thought the vertical would have been drilled by now but I guess not or possibly Origin is still evaluating the Kyalla shale at this location.
I'm still sticking with the new release promise POQ gave us.
NewtoFo: I had a nice visit with the CEO last year - hopefully he can make time for me this year if I make the effort to go. The meeting itself is a non-event other than a few questions/answers and the corporate presentation which will be posted later. The face time is worth the trip to me.
987: Must not be leaving from Texas :^) I've got to make that decision PDQ - running out of time. Christmas season has me pretty tight on scheduling as I certainly don't want to have to do a fly-in - fly-out trip or anything close to that - Flying is a pain in the arse in more ways than one!
Poods: I'm probably of the same vintage as you. A lot of us 'old timers' can relate. I worked my freshman summer in college for a well servicing company working on the floor of pulling units which was (is) considered the most dangerous job in the oil field. My job was to show up at 4:00 am each morning and be assigned to whatever crew had someone thrown in jail the night before and didn't show up for work. The job resulted in long hours of being completely soaked alternatively in salt water or oil - whatever the next string of tubing held - at lunch or at the end of the shift we were given kerosine and a rag to clean up which in the 100 degree plus days would blister the skin. I would get home at 10:00 at night only to rinse and repeat! I managed to escape the summer with all my fingers and toes and just one cracked rib. I watched idiots on the pulling unit floor smoking while gas flowed freely from the well. Being a newby college kid I had the 'opportunity' to hand wrenched 7500 feet of rods only to change a pump to then proceed to put it all back in the hole. I had stands of drilling pipe falling out of the racks overhead, chain tongs knocking me to the rig floor all for the wage of $1.20/hr. If nothing else, that summer taught me what I didn't want to do the rest of my life and the importance of a college education! The industry out of necessity has evolved but I still have great respect to this day for those employed on pulling (workover) units - its a nasty dirty job that' necessary to keep these wells flowing.
I'm sure others on the board have similar stories about various industries. For me it's nice to be on the 'other side' of the oil field - hopefully Falcon will complete and bring full circle my experience in the oilfield. GLA
Poods: I still believe Falcon will be releasing news as the Kyalla well reaches important milestones. POQ gave me the impression he will keep the stockholders informed as the well progresses - I am thinking the decision to proceed with the horizontal lateral would be one of those milestones - we shall see. Somewhere I had about five news releases in mind for the Kyalla well though in my old age I can't recall where I came up with that!
Note that on the Amungee well there was news released prior to the flow test - see the cut below from the November 18, 2015 news release. Admittedly this was at the end of the horizontal leg but then ahead of any fracking. This is the kind of information we might of interest at this point.
Philip O’Quigley, CEO of Falcon commented:
“This continues to be an exciting time for Falcon with continued positive developments for the Beetaloo Joint
Venture. Experiencing excellent gas shows during the drilling of Amungee NW-1H demonstrates the high level
of gas saturation in the entire horizontal section which is a strong indication of the potential prospectivity of
our Beetaloo acreage. The stacking of rig 185 demonstrates further commitment from our JV partners Origin
and Sasol, and will enable us to commence the 2016 drilling and exploration program at the earliest possible
POQ has assured me that he has 'clearance' from Origin to issue news releases on the Kyalla without Origin's prior approval - that likely does not include the final test results which would be material to Origin stockholders.
I don't know what to think of the price action - the stock had no reason to do what it did before on the Amungee well. Seems the closer we get to potential positive news the stock declines - go figure!
Kmj: Nice recap of Falcon and its current situation. Regardless of what the current stock price allows, in about 17-18 months we will realize the true value of Falcon's Beetaloo assets. While the day to day unexplained price decline makes no sense it is just a repeat of the pre-Amungee NW 1H price action and that .05 cent low. Whether the Kyalla and/or the Velkerri wet proves successful, Falcon's current price is an attractive buy.
Hopefully within a few days (?) we will get some type of preliminary indication on the Kyalla well. I am still thinking we will get some type of release based on the vertical findings if the horizontal is scheduled to begin - that in itself would be positive news. Frankly I'm a bit surprised that initial vertical TD has not been completed/reported as the Kyalla is not that deep - Origin estimated 30 - 45 days for total vertical/horizontal drilling - here we sit at 27 days.
This next year will be an exciting time for Falcon -after the Velkerri wet is completed next spring there will be a rapid turnaround on what shale to drill the two fully blown horizontals. That decision of where to locate those two wells will give us a good indication of where Origin/Falcon sees the best Beetaloo potential. If those wells are offsets to the Amungee area that is great - if their location is the Kyalla or Velkerri wet then the Beetaloo's potential just takes a paradigm shift.
My Comment: Bad for the Farmers but good fracking weather!
Three month outlook: Below average rainfall set to continue
Katherine Times Nov 1, 2019
RAIN is coming, but farmers will have to wait until early 2020 to see meaningful falls according to the latest three month outlook issued by the Bureau of Metereology.
BoM computer modeling issued on Thursday shows rainfall is likely to be below average across most of the country for November, with only western Tasmania likely to be above average.
"This pattern of drier in NSW and wetter in western Tasmania is consistent with a negative SAM (Southern Annular Mode) pattern persisting for most of November," BoM says.
Adding to the frustration is the drier outlook is expected to continue into December for most of Australia, although BoM says the chance of drier conditions is lower compared to November.
"The summer (December to February) outlook is far more neutral, although most of eastern Australia remains likely to be drier than average," BoM says.
"While outlooks for drier than average conditions may ease for some areas in the coming months, it should be noted that several months of above average rainfall would be needed to see a recovery from current long-term rainfall deficiencies."
Newtofo: Good information on the analogous Marcellus shale. Thanks for taking the time to research and post.
I was told that a similar flow rate as the Velkerri B would be considered a very successful well - it gives us something to anticipate around year end. Go Falcon!
Darnit: Your guess is as good as any. From what someone said the production tubing was undersized, etc. A simple extrapolation of the 1.07MMs/cfd may not be very accurate - personally your figure sounds more commercial - 3.5MMs/cfd doesn't sound like much to me. I hope you're expectations are met :^)
BO: The final EPT rate of the Amungee well was 1.07MMs/cfd. That rate was based on a 600 meter frac. Best I know to do is extrapolate that figure to a standard 2000 meter frac - that would equate to 3.5MMs/cfd. That doesn't tell me much as to the commerciality of a Velkerri B well as that is just part of the puzzle.
What I do find promising is that POQ once told me that Origin was extremely happy with that 1.07MMs/cfd rate as the well produced more than anticipated - If they were expecting less whatever that amount was must have been a potentially commercial amount.
Also of interest is the following cut from a Falcon news release:
"Additional exploration and appraisal activity will be required to refine the pool size and better assess
the recoverable resource range and ultimately the commerciality of the play.
However, it is interesting to note that in Origin’s opinion the Marcellus and Barnett Shales in the USA
are analogous, commercially-productive fields that are similar to the Middle Velkerri B Shale
Origin equates the Velkerri B to being analogous to the Marcellus and Barnett shales. That tells us a lot about the potential Origin sees in this discovery.
You rightly mentioned that the Amungee NW-1H well was an expensive well (as will be the Kyalla and the Velkerri wet). That is to be expected with an early appraisal well. If these wells go into development drilling the cost will greatly drop as Origin begins drilling up to 16 wells per pad site.
Lots of unknowns at this point - especially for those of us on the outside looking in. Falcon and Origin seem excited which makes me excited.
Article in the Katherine Times:
November 1st, 2019
Fracking plans during the wet come under fire
The rush by energy companies to explore for onshore gas may see fracking during the wet season, one group fears.
Three companies are hard at work testing their wells in the Beetaloo for shale gas with the annual rains expected within the next few months.
Protect Country Alliance said it feared the wet season rains would place the storage of waste fluid at risk.
While Origin Energy did not directly comment on any plans it has to frack its exploratory wells during the wet season, it said it was well prepared for the wet.
The alliance criticised company plans to keep waste fluid from fracking in open tanks, it claimed that was in contrast to the recommendations of the Pepper Inquiry.
An Origin Energy spokesman today said the use of open evaporation ponds was a credible and environmentally acceptable practice which is approved by the EPA and Department of Environment.
"As with all of our activities, we have multiple layers of controls in place to ensure the environment is protected," the spokesman said.
"In the case of evaporation ponds, they are not filled to capacity to ensure there is enough space to accommodate a 1 in 1000 year rainfall season. This is a regulatory requirement.
"In addition, we use enclosed tanks as our primary storage for flowback fluid, and only when the environmental conditions are acceptable, we transfer fluid to the one open pond to evaporate."
Alliance spokesperson Graeme Sawyer said Origins decision to frack during the wet season showed arrogance for NT communities and the environment.
How dare this company suggest it is okay to keep fracking waste fluid in open air tanks during the highly volatile wet season, when cyclones can flood water catchments in minutes, he said.
Justice Pepper was very specific in recommending that fracking waste fluid not be kept in open air storage units, yet the NT Government, at the behest of industry, has chosen to ignore this recommendation."