Falcon Oil & Gas Share Discussion Threads

[themadstork] 06/4/2016 17:13

Of course not. However, as I posted several times, the anticipaton of the drill campaign was always bound to shift it as the drilling season approached. It's actually taken slightly longer than I expected to move, but now that the large seller that was keeping it pinned at 5p appears to have cleared, I see no reason why it can't repeat last year's pre-drill run.

[arc en ciel] 06/4/2016 16:24

Come off it, Stork. Do you mean to tell us you KNEW it would go up nearly 20% in a day today? On no news?

Are you indeed mad or do you think we are?

[mr hangman] 06/4/2016 13:20

Very wise Mr Stork

[themadstork] 06/4/2016 13:11

And this is why I bought so many at 5p.

[arc en ciel] 24/3/2016 18:49

More developments in LNG offshore NW Australia:

[themadstork] 11/3/2016 16:10

Good to see the drill program confirmed. Hopeful of a steady rise over the next couple of months.

[sleveen] 09/3/2016 07:22

No mention of the petrophysics results on the 3 drilled wells.

[loganair] 04/3/2016 09:49

Falcon Oil & Gas - Reward Outweighs Current Risk:

Summary:

Excellent gas shows in the Beetaloo have resulted in an acceleration of the drilling program.

Falcon has over $10 million in the bank and no debt. It is being fully carried across the nine-well drilling program.

If the asset is commercially viable, it lines up with similar shale plays in the US such as the Barnett and the Bakken.

2016 should end up being a defining year for Falcon and particularly its Beetaloo basin asset. Shareholders will do extremely well if the asset is commercially viable because the resources and acreage compare very well with the US shale assets such as the Bakken and the Barnett. Once we get fracking and testing wells out of the way (which should happen in 2016), we will know for sure what type of an asset we are dealing with here. Falcon's objective is to sell the asset. It does not want to take this asset into production, which would indicate why there could be a substantial move in the share price if a sale does indeed take place in the next 12 to 24 months.

At the moment, the stock is trading at $0.08 a share, which gives the company a market cap of $68 million (never been lower). It presently has over $10 million in the bank and is being fully carried across the nine-well drilling program in Australia. Now here is how it differentiates from producing companies, which minimizes the risk in my opinion, especially when you consider where the share price is at the moment.

1. The company has no debt. It doesn't need to go into debt to keep its capex budgets elevated or return cash to shareholders. Asset evaluation has all been done currently off the back of its partners.

2. Falcon has no production. All upstream companies or integrated companies with upstream divisions are hemorrhaging cash at the moment. Falcon doesn't have this problem.

3. No funding requirements mean the company won't have to dilute the float for the foreseeable future, which is crucial for penny stock investors.

Furthermore, with respect to the Beetaloo basin and its 4.6 million acres, the recoverable resources are actually bigger than some of the major shale plays in the US. Studies have shown that there is a 21 billion barrel oil equivalent potential and 162 "TCFG" (trillion cubic feet of gas). Nevertheless, getting all this energy above ground in a commercial way is another task in itself. Producing unconventional plays normally have 4% to 5% total organic carbon (TOC) (Beetaloo has 4%). Average shale thickness also is a predetermined requisite where usually 30 meters is the minimum for unconventional plays. Well, the Beetaloo passes initial results here once again with ample thickness throughout the asset.

Over the last 24 months this stock has more or less followed oil down since the summer of 2014 with the exception of a spike in the share price last May that didn't materialize into anything. The reward definitely outweighs the risk here in my opinion.

[mr hangman] 04/3/2016 09:38

up we gooooooooooooooo

[heaven above] 04/3/2016 09:36

Could be sub consciously connected to the death of former Chesapeake Energy Chief Executive Aubrey McClendon, who last year bought millions of very cheap acerage in the wider NT in Aust. The value of that land in the deals last year was well below what the Falcon JV parters paid.

Point is that with his passing it makes the wider development of the NT for energy even less likely as it was his dream and passion.

My view is FOG should sit at 2p max.

Just look at the gas price, at 17 year lows. No one is going to invest the billions needed at these levels.

[sleveen] 04/3/2016 09:28

Why the sells this am?

[themadstork] 02/3/2016 16:00

Well I disagree for the short/med term. I think the upcoming resumption of drilling will spark some interest/movement regardless of the wider market conditions.

[heaven above] 02/3/2016 15:19

FRACKING IS WRONG

[heaven above] 02/3/2016 15:17

that's was before i knew:

political risk mid/late summer. see LSE forum for reports

change of party means change of policy at local level

i didn't consider how much the price of gas has fallen since the JV agreement.

i didn't know about the political risk

neither did i appreciate the JV can walk away at the end of the year

great plan for this year. spend $40m on a bit of fracking/burn off some gas in the middle of nowhere

why bother? why not give the cash to shareholders? what is the point?

[mr hangman] 02/3/2016 15:12

Haven posted this on 10/02/2016 on the 88E Thread

Falcon Oil & Gas appears to have an even bigger resource than 88e yet no one is interested.

Free carry on 9 well drill program to 2018.

Estimate 6.3 billion barrels of oil recoverable and 48 trillion TCGF (gas) (net figures to FOG)

Cap 47m with 10m cash

Giants Origin and Sasol doing the drilling/testing.

No new shares until at least 2018 according to CEO in presentation in Nov.

Had great drilling results last Autumn and slipped from 7.5p to 5p

[heaven above] 02/3/2016 15:07

i am also of the view that the price failed to hold the november gains precisely because last years drilling only found gas. the market had hoped for oil saturated shale like 88e but gas don't cut the mustard I'm afraid. i'm also of the opinion that gas use may naturally decline as new alternative sources of energy are thrust upon us by the climate change tree hugging brigiade

gas prices may never recover

[mr hangman] 02/3/2016 14:59

zzzzzzzzzzz

[heaven above] 02/3/2016 14:51

stork. there won't be any point in drilling if a change in local government introduces a permanent ban on fracking. the elections will most likely be before the fracking which i don't expect until sept/oct.

gas is now about 60% lower than it was when the JV was struck

[mr hangman] 02/3/2016 14:49

looks like someone was looking to buy below 5p & missed the boat

[themadstork] 02/3/2016 14:49

There's a political risk, but the election will not impact this year's drilling. I'm holding based on a swing trade facilitated by impending news/activity, same as last year. Not interested in holding long term.

Nothing wrong with changing your mind, just seems odd since the fundamentals have not changed since your positive post and arguably improved somewhat due to the rising oil price.

[heaven above] 02/3/2016 14:44

you also now have political risk mid/late summer. see LSE forum for reports

change of party means change of policy at local level

in that instance FOG shares may be worth very little

so that's a lot of risk if you ask me?

yes, it's ok to change your mind based on changing outlook. that's how you avoid losing your money in the markets. feel free to hold though.

i didn't consider how much the price of gas has fallen since the JV agreement.

i didn't know about the political risk

neither did i appreciate the JV can walk away at the end of the year

RISKY

[themadstork] 02/3/2016 14:43

There will be a rise nonetheless as people anticipate activity after 6 months of quiet.

Also, you seem to have changed your mind re FOG rather quickly:


heaven above - 11 Feb 2016 - 12:50:43 - 384 of 403
Current share price is odd. Surely some big players/ VC's will be looking at Falcon at the moment?

Offer at 10p would give the buyer.

The Beetaloo/Karoo net acreage of 3.2m acres at about US$50 an acre.

A$143M free carry on Beetaloo drilling until 2018

10M in cash.

80m in seismic data already invested.

Near term 2016 value creation, new drills, multi stage fracking.

Origin and Sasol as major committed partners.

Medium term upside in South Africa Karoo Basin with 1.9m acres net to Falcon.

The free carry drilling on the Beetaloo alone is worth 7p a share for anyone in the industry interested. So essentially a buyer now gets a free punt on 1.3m acres at $50 an acre multiplying by a factor of blue sky 20 or 100 times.

Recoverable estimates are for 21 BBO and 162 TCGF in Falcon's Beetaloo acreage.

If I were a VC/mid cap/major player I'd be looking at Falcon now.

[heaven above] 02/3/2016 14:39

they have no choice. this year is drill or pay.

but the bulk of the future spend in 2017 and 2018 is optional. they can walk away

it's just not economic to spend billions on development