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Some pretty good exchanges today in the chatroom. Again, I had to smile about "poor" POQ being caught in the middle of this. However, he is being paid nearly $500,000 with perks to be our chief executive, I must agree that given the current events, he would not in my opinion be incorrect to assume his shareholders might be interested in what is going on regarding the holdup in drilling he has been predicting. If he is on the golf course, perhaps one of you locals to him might ask if he has time to take care of his shareholders. If he has nothing to say or to say, he should explain in either case. For today, onward and downward!
Thanks for the response Namu though you didn't directly answer my question as to drilling in 2019. I assume your dark cloud scenario doesn't include any planned drilling for this season - unless you consider drilling to be a dark cloud.
I am still of the camp that believes that the escalation of drilling cost over the 2 1/2 year moratorium as reflected in Origin's updated AFE is the reason for the raise. If the two wells had proceeded this year with no raise it would have reduced Falcon's cash to below $1 million - Davy cautioned them against putting themselves in such a dangerous drawdown of cash.
If no drilling in 2019 then I certainly can't see a need for a additional raise in early 2020. There will be plenty of cash and a solid $130 million remaining carry. Maybe you can give us some dark cloud examples of what you are thinking.
At this point I don't have an opinion on whether drilling proceeds this year or not. If the NT issues the Kyalla EMP permit then I suspect things are a go. I have heard there are similar pastoralist suits waiting in the wings - is one of those potential suits a problem for the Kyalla or possibly of concern to a potential alternative site? - don't know. The NT government can likely calm the waters if they propose a schedule to work towards signed access regulations by the end of the year and make those retroactive to current projects - they have already mentioned that was their intention.
Again - Thanks for the response.
I am looking for some type of NR from Origin this week in answer to this suit. I know that the filing of the suit caught POQ by surprise - he was pissed and is in Australia working with Origin for a way to move the ball forward - I heard that he is still insistent that the drilling program proceeds this year. Some of you guys want to blame POQ for this fiasco - If I were to lay blame it would be on companies like Origin and Santos for not getting ahead of this curve. They thought it would go away and they would continue as usual but it looks like this chicken has come home to roost
IMO even though the pastoralist are basically lessees, having lot of trucks/equipment constantly running up and down their roads can be a source of irritation - here in the states 'surface damages' and 'access fees' tend to help with that irritation.
Well, we know that the no-go zones have to be finalized. So hopefully that gets done in the next week or so.
Also, according the new petroleum regulations, the Environment Minister must make a decision on an EMP within 90 days of it being accepting, so Santos' EMP should be approved (or denied) within the next 2-3 weeks.
That's kind of what I see as the next pieces of positive news that have some known deadlines. Maybe there will be a surprise piece of positive news along the way to get us to the EMP approval. I am 100% sure the hit pieces will keep coming from the anti-fracking brigade.
Naminanu how dare you point out the obvious, one more comment like that and you will be relegated to Bigones status. In all seriousness, we need some type update from the powers that be, good or bad!
Orson - insightful and of value unlike most of my offerings...cheers...
Clearly, clearly clearly the capital raise was done to hedge against dark clouds that POQ saw forming. Perhaps these dark clouds were in the shape of a billionaire environmentalist, or some other news item that we’ll learn about soon.
That said, raising money at 14 was probably smart. Better than raising at 7p, which is where we’ll soon trade without news. POQ has egg on his face, as placement participants are quickly in the red.
That’s why I expect another raise in early 2020. Too many dark clouds lurking that can’t be forseen by low level shareholders like us.
Thanks Orson for digging up the Stage 3 requirements as I had only reviewed the current Stage 2 exploration requirements in depth - as my view has been primarily focused on getting the exploration wells started this year. Hopefully, we hear something positive from Kirby and Gunner soon that not withstanding the current legal challenge that exploration work will be commencing soon.
Anyone looking to buy more shares on the TSX should keep my old adage in mind - as it looks like we are heading to sub 20 cents CDN - if there is no statements from the powers that be fairly soon to stop this never ending drip drip drip downwards.
While all of these are listed as phase 3 requirements, there are some recommendations that address land access agreements.
14.6: That a statutory land access agreement be required by legislation.
That prior to undertaking any onshore shale gas activity on a Pastoral Lease (including but not limited to any exploration or production activity), a land access agreement must be negotiated and signed by the Pastoral Lessee and the gas company
Target completion date: Stage 3. To be completed by end of 2019.
14.7: That in addition to any terms negotiated between the pastoralist and the gas company, the statutory land access agreement must contain the above standard minimum protections for pastoralists.
Target completion date: Stage 3. To be completed by end of 2019.
Now, if you remember, the inquiry did not grant pastoralists the right of veto. And the point of these recommendations is that there must be a signed agreement in place. But there are process in place to ensure a resolution is reached. Namely, if the operator and pastoralist cannot reach an agreement on their own, they go to the arbitration panel, who then determines the rights of access for the operator. The pastoralist can appeal the arbitration board’s decisions to the courts, but the appeal does not stop the operator from proceeding at that point.
From the articles that have come out related to the Blundy case, it has already been stated that Origin and Blundy have gone through the Arbitration Board. So, it appears this is why he has now taken his case to the courts. It seems to be a pretty weak case. And, it is really only a determination of terms of access and compensation. All this leads to why the NTCA is now pushing so hard for the above recommendations to be implemented ASAP.
This is what all I have gathered at this point. I don’t see any reason why Origin couldn’t proceed with the Kyalla well this year, and if they have time, a second well. It just might not be on the Amungee station. The good thing is Origin has already cleared a number of sites with TO’s and other station owners for other test sites as evidenced in the EMP.
The Blundy lawsuit should not delay the kyalla first liquids test well - as that well is not on any of the Blundy pastoral leases and I believe we should get confirmation on that exploration well going ahead fairly soon and the sooner the better. The civil works to put in the road access and well pad are already underway - so very doubtful that that the most important well for Falcon/Origin won't go ahead this dry season.
The second Velkerri wet gas well could be impacted as that one was planned for one of Blundy's pastoral leases -- so that well could be delayed or moved to one of the other water bore monitoring sites that Origin initiated last Fall.
The recommendation that the drilling companies and the pastoral lease holders have a statutory land access agreement in place was not one of the 135 recommendations but rather was a strong suggestion. The Justice Pepper inquiry also noted that this was something that was outside of their mandate -- as it opened up the question as to whether the Territory government would have to legislate access agreements for every single type of mining or resource based business - if they started requiring the same from gas companies. Here is the exact wording from the Pepper inquiry:
“It is the panel’s "strong view" that, prior to any access to a pastoral lease, a signed land access agreement (statutory land access agreement) must exist between the pastoral lessee and the gas company.
Will this cattleman’s lawsuit delay the drilling of the first well in the kyalla formation?
Someone mentioned that the site for this well is outside the plaintiff’s property? Also if one of the Pepper reports recommendations called for a specific agreement between industry and pastoralists, how could Origin have completely dropped the ball on this? Hard to imagine they didn’t make sure everything was covered properly. What are the chances that no drilling happens this year? Appreciate any thoughts