Falcon Oil & Gas Share Discussion Threads

[nw99] 24/4/2015 07:36

Time to buy

[scargs] 07/4/2015 19:58

loganair

Thank you for putting Ian Lyall's article on the board.

As a matter of interest, where did you find it?

Scargs

[loganair] 07/4/2015 18:18

Falcon Oil & Gas insulated from oil price turbulence, and potentially on cusp of something exciting By Ian Lyall:

There are few oil and gas companies that can claim to be insulated from the turbulence caused by US$50 a barrel oil.

But if you have zero capital expenditure, no debts, a decent cash pile and your drill commitments are fully funded then life looks a lot rosier than it might for a junior sitting on a dwindling source of funds with contractors to pay.

The position of Falcon Oil & Gas (LON:FOG), with over US$18mln in the bank at the last update, is that it can withstand several more bouts of the jitters as Saudi Arabia and the US slug it out for oil supremacy.

Not just that, it is on the cusp of something potentially very exciting, even if the true worth will only be fully captured once the price of a barrel of crude moves back to more normal levels.

It is a 30% shareholder in 4.6mln acres of the Beetaloo Basin, an unconventional play in Australia’s Northern Territory, where its farm-in partners are local firm Origin Energy and South Africa’s Sasol.

The pair are committed to a US$64mln drill programme that starts in June designed to unlock the mysteries of the area. This is part of a larger nine-well deal valued at US$200mln to Falcon.

The resource potential of the Beetaloo could be enormous if it does shape up to be the massive shale play modelled by current estimates.

A 2013 report by industry consultants RPS estimated its gross recoverable resource potential to be 162 trillion cubic feet of gas (at a 50% confidence level) 21.3bn barrels of oil.

Early results from Aussie explorer Santos in the McArthur Basin targeting the same mid-Velkerri horizon to be probed by Origin returned some interesting results.

Remember first, the Beetaloo is a subset of the McArthur Basin so the Santos data when it is seen in full will have some resonance for neighbours.

All we know at the moment, however, is Santos found 500 metres of net pay – that’s large by any standards – and elevated gas shows. Talk is the attributes of mid-Velkerri matched those of the best US shales.

Only time – and a good deal more exploration - will tell if this turns out to be true.

As Santos is playing its cards close to its chest at the moment, Falcon and its partners will have to wait and see for themselves what lies within the Beetaloo. The drill rigs are finally set to start turning in June.

The risk, and it weighs on the current valuation of Falcon, is that its partners won’t actually pull the trigger on the initial exploration programme.

It is wise to be guarded on these matters, particularly with Big Oil retrenching in Australia and elsewhere around the world as they are forced to make their limited funds somehow go further.

But a point to be borne in mind is that Falcon’s deal with the operator Origin and Sasol is a drill or pay. It covers five wells, three this year and a further two next.

So, failure to carry out the work would result in some sort of financial compensation – whether the full US$64mln would be forked over is open to debate. But the contract is drill or pay.

That said, those with the ears to the ground in Australia suggest the preparatory work such as rig contracts, civils and landholder access are all in the process of being finalised.

If this is true, then we can expect the second half of 2015 to be fairly significant and reasonably exciting for Falcon.

But be warned, the three initial wells planned for this year are unlikely to deliver the sort of information on which meaningful economic modelling can be based.

They are designed to assess the carbon content of the Velkerri and to identify the thickest shale of sequence.

All of it will be part of the sweet spot hunting that will then direct next year’s two big wells – one vertical, the other horizontal. Both will be fracked.

An interesting aside to the work about to start in the Beetaloo is the emergence of the Japanese gas giant Inpex as next door neighbour to Falcon and its cohorts.

It picked up 2.4mln acres shed by Falcon just before it signed on the dotted line with Origin and Sasol.

It will be interesting to see whether a relationship develops there with the owner of one of Australia’s three major liquefied natural gas trains.

In South Africa, investors have stopped trying to guess when the oil and gas companies will receive exploration licences for the Karoo Basin. Here, Falcon currently has a technical co-operation permit covering 7.5mln acres.

The Karoo covers 600,000 square kilometres of semi-desert north of Cape Town that contains thick, organic rich shales similar to those seen in the Permian Whitehill Formation. The US Energy Information Administration estimates it could be host to 390 trillion cubic feet of technically recoverable gas.

Those who have followed the situation closely will have noted a change in the mood music from the legislative authorities, although some will have been spooked by the departure of Shell from the country.

Progress is being made on the issue of fracking and the authorities are widely expected to start issuing exploration licences for the Karoo by the end of this year as legislation is re-fettled and made fit for purpose.

If Falcon does indeed get its long-awaited licence, this allows the company to solidify its relationship with American oil major Chevron.

In Hungary things haven’t been particularly positive with a record of two dusters from two wells drilled in Mako Trough.

However, most in the know expected this result. Remember, NIS was supposed to drill three in total, so it will be interesting to see what happens next. For its part, Falcon says it is doing everything possible to derive shareholder value.

Predictably, Hungary has been a drag on sentiment. Perhaps surprisingly, the prospect of drilling in Australia and progress in South Africa haven’t really been factored in. On that basis there may be an opportunity for those brave enough to grasp it at this phase in the oil price cycle.

[chrisoil twitter] 22/2/2015 10:02

called it right HUR, the Falklands and basically every blog i have made has been correct on www.chrisoil.blogspot.co.uk

get looking at Falcon oil

ps click the ads money going to chairty end of the year

[cyan] 15/2/2015 15:05

CHRISOIL TWITTER, Undervalued Companies, mr hangman, Ghostofahangman and Falklands.

What do these avatars have in common? lol

[loganair] 14/2/2015 12:53

Brent crude, which has plunged in recent months amid a supply glut, climbed as high as $61.77 a barrel, breaking above $60 level for the first time since December amid hopes that global oil production will fall. Optimism about the world economy, spurred by better than expected German growth data and growing confidence Greece will reach a deal with its creditors, also gave metals prices a boost.

[chrisoil twitter] 08/2/2015 18:59

Some good news please see my blog www.chrisoil.blogspot.co.uk new in depth article now out on the company as requested. With advfn article on Falcon Oil.

regards all

[chrisoil twitter] 27/1/2015 00:11

New article out Live Falcon Oil & Gas (FOG) its a BUY

[undervalued companies] 26/1/2015 23:02

Yea buying some but the good news new blog mentioning falcon hxxp://www.chrisoil.blogspot.co.uk

Stanley note 51p beetaloo yum yum not to mention s.Africa 18.5p fully funded

[bones30] 26/1/2015 12:30

Shame about today's news but the Mako Trough is only ~12% of the story here and there's still the deep play farm out.

Waiting patiently till things hot up in Oz.

[bones30] 21/1/2015 19:07

Looks like worst case:

-- Farminees may reduce or surrender their interests back to Falcon only
after:
-- the drilling of the first five wells or
-- the drilling and testing of the next two horizontally fracture
stimulated wells.

[bones30] 21/1/2015 19:04

•The deal includes the drilling of 9 wells as follows:
–3 Vertical exploration/stratigraphic wells and core studies
–1 Fracced vertical exploration well and core study
–1 Fracced horizontal exploration well, commercial study and 3C resource assessment
–4 Fracced horizontal exploration wells, micro-seismic and 90 day production tests
•Falcon fully carried for all costs of first five wells, estimated at A$64 million
•Falcon carried up to a cap of A$101 million on the next four wells

Of course, those wells wouldn't cost so much given drilling costs lower but got to be worth more than the EV of FOG by still a long way.

[chrisoil twitter] 21/1/2015 16:15

you aint seen nothing yet bones wait until Spring time

[bones30] 21/1/2015 13:27

6.4859p paid for 76,998. Stock must be tight?

[bones30] 20/1/2015 15:42

Few items people may be interested in:




"The public meeting in Cape Town will be at the Parow Civic Centre on February 11 from 5.30 to 7pm. " --- could be a catalyst.

Been listening to Chrisoil podcast too. Some interesting points made.

[bones30] 20/1/2015 15:11

Bit of movement on L2.

[loganair] 17/1/2015 14:49

From oilpro.com by Don Minter:


I've been in the oil patch for more than 25 years. During that time, I've seen quite a few rounds of ups and downs in the industry. I mainly work upstream, but I've done some refinery and petrochemical plant work as well.

Right now, people are nearly panicking because the price of oil is at $45/bbl, more or less.

I just want to add a little perspective: Oil first hit $45/bbl in 2004. The next shock headline to follow up today's "Oil Prices at 6 Year Lows" could very well be "Oil Prices at 10 Year Lows." The last time we saw this type of volatility was the exuberance and panic of 2008-2009, which was both short-lived and extreme. During the 7 months from July 2008 to February 2009, the price of a barrel of WTI went from $133 to $39. From that point, it was a steady rise until roughly June 2014 when the present fall started.

No one knows where today's price will bottom out, but everyone should have the perspective that "this, too, shall pass." If this cycle follows the 2008 trend, then we should start to see prices stabilize within the next two to three months. Personally, I will just wait and see. This isn't the first cycle in the oil patch, and I sincerely doubt it will be the last.

[chrisoil twitter] 14/1/2015 17:40

Just highlighted oil debate with Justin and podcast. You can read my article on advfn financial news highlighting falcon oil an excellent hedge play

[jeffcranbounre] 08/1/2015 20:40

Falcon Oil is mentioned in today's ADVFN podcast, as a minimum ten bagger.

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Hays #HAS
Talk Talk #TALK
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[travls] 29/12/2014 19:23

This company is more or less bust.

Stay well clear.

[thecynical1] 19/12/2014 11:04

undervalued companies.....very cryptic? care to elaborate?

[ghostofahangman] 18/12/2014 15:01

shhhhh, don't tell everyone Chris

[thecynical1] 16/12/2014 12:59

where did the guys/gals with the personal vendetta come from?

Guys - this is a BB for discussing Falcon Oil and Gas. Take your private quarrel somewhere else please! Thanks.

What do people make of this RNS? Are there issues ( shareholders making noises about wanting places on the board? ) in the background that they are trying to quash in advance? Anybody got any ideas?