Falcon Oil & Gas Share Discussion Threads

[arc en ciel] 26/2/2017 21:22

At the last State election in Northern Territory in August last year, the incumbent Conservative/Liberal party lost, mainly on grounds of personal 'indisgretions' by its leading candidate.

Thus the Labour opposition, with a clear mandate to ban fracking in the state, won convincingly. Since then, the NT government has set up a nominally independent committee to report on technical matters relating to fracking. This will present an initial report by the end of March.

If, as one supposes, the drilling and gathering operations being practised in the US are concluded to be as safe in NT as they are in the long-proven Bakken or Eagle Ford US fields for example, in the absence of sheer political posturing, the decision to frack or not to frack should be motivated primarily by the colossal economic benefit to the State, its citizens and the whole Australian nation.

I do not know how the NT socialist government can avoid implementing its election manifesto if it decides to allow fracking if it is proven to be safe. Maybe it would need a referendum, maybe it would go ahead anyway on the technical committee's conclusions or maybe it would just ignore its previously stated policy as Clegg's Liberal Democrats famously did with its student loan policy after joining Cameron's Cons/LD coalition.

The US fracking oil and gas industry produces around 10m barrels of oil equivalent per day with acceptable levels of safety. Pad drilling, which can drill multi-kilometre horizontal channels in up to 8 directions from just one drillpoint covers the ground with minimal visual or audible disturbance. Water tables are normally thousands of metres above the drilled frack levels.

Origin is an Australian gas-providing utility company which needs substantially more supplies to meet growing domestic market needs; Sasol is an enterprising South African oil and gas major.

Either one could bid for a larger share. Or, for example, Falcon could sell an equal share to each so that they become 50/50 partners. However, it is more likely that the current three JV partners will prove up the enormity of the contained hydrocarbons and the efficacy of processing in a definitive study and then market the whole project to a globally important Tier 1 player.

[mirabeau] 26/2/2017 08:46

arc e-c

Thanks for the clarification and for the update. Your wording of the current state of affairs cuts through and simplifies

Maybe you can answer the following questions.

Who actually takes the final decision to impose and then hopefully lift the moratorium (or certainly ease its restriction)?

Is this a political decision or is it a decision made by the NT govt following direction from the owners of the land who I assume are the 'indigenous people'?

What do you believe is the commercial value of Falcon's 30%? Some say the discovery represents the equivalent of 82bn boe with a recovery of 18%. That's 4.5bn boe owing to Falcon. That's a huge, huge sum for a tiny company like Falcon..

I wonder if Origin would be inclined to buy Falcon's minority stake? This reminds me of MARL


so near and yet so far away

[arc en ciel] 25/2/2017 22:10

Mira

Origin did not "discover" this field. Some of the history was described in my post 589.

Falcon first acquired the prospect, then farmed out to Hess and took a full reversion after Hess had carried out extensive and expensive exploration but then decided to stop any further development.

Falcon then negotiated a second farm-out, 70% to Origin and Sasol (37.5% each) who have financed the subsequent exploration, leaving Falcon with a retained 30% of the prospect plus some $10m in cash.

The two farm-out partners are still paying development costs to earn their share, with Falcon currently free-carried.

[mirabeau] 25/2/2017 09:50

'Last week Origin Energy announced it had discovered an onshore gas field in the Beetaloo Basin which is five times larger than the Inpex field. The Inpex field is expected to produce gas for 40 years.'

I find this statement utterly astounding. It would be quite incredible if the NT govt refused to exploit this massive natural resource through the use of fracking even on a limited basis. Any hint that fracking may be allowed at Beetaloo would see FOG explode upwards..

I intend to track newsflow from the NT regarding this issue

[thecynical1] 24/2/2017 10:29

arc.....the article is free access...?

[davidblack] 23/2/2017 17:49

The Australian political timetable is what matters here. Turnbull is struggling in Canberra whilst the new NT government have a good mandate and will not want to undermine that broad base.

Pencil in a decision in 18 months when the NT government wants to talk jobs and prosperity to get reelected.

Remember the three mines policy took years to unwind so don't expect this to be a matter of months.

[arc en ciel] 23/2/2017 14:55

Thanks Loganair

So, the argument is all politician hotair.

Let's trust the Clinton vindicated claim " It's the economy, stupid" wins out.

[loganair] 23/2/2017 09:31

Article from the LSE site - Australia has to develop more gas and the Gunner Government is depriving Territorians of a rich resource and the prosperity which comes from it, the Prime Minister said ­yesterday.

Malcolm Turnbull, in town for the Bombing of Darwin anniversary, said Labor’s opposition to gas was an “ideological attempt” to win votes off the Greens.

The Gunner Labor Government has imposed a moratorium on hydraulic fracturing until an inquiry reviews the extraction process and determines the safety of the practice.

Last week Origin Energy announced it had discovered an onshore gas field in the Beetaloo Basin which is five times larger than the Inpex field. The Inpex field is expected to produce gas for 40 years.

Mr Turnbull said Labor’s policy would increase costs.

“Restraining access to a big resource is clearly going to deprive Territorians of having access to a very rich resource and the prosperity which comes from it and it is going to put pressure on costs and energy prices in Australia,” he said.

“We need to have more gas developed all across Australia. If the Labor Party wants to go around chasing Green votes and preventing the access to gas resources then that has one obvious consequence – it makes gas more expensive and less is available.

“That undermines families. It makes energy more expensive. It undermines business because they don’t have the energy they need and it deprives us of a lower emission fuel. “

Chief Minister Michael Gunner said his Government was responding to environmental concerns. “At the end of the inquiry we will either ban fracking in the Northern Territory or allow it in highly regulated circumstances in tightly prescribed areas,” he said.

“We will put the Territory first and make the best decision for the Territory and we will not put at risk existing fishing, farming, tourism and cattle jobs for the possibility of jobs from fracking. An open and transparent approach is needed into the genuine environmental concerns held by many Territorians.”

[arc en ciel] 23/2/2017 09:19

Great stuff, cynical. However, the turnbull story is seemingly only available to NT subscribers.....

Roll on March and an indication NT will have to lift its ban as technical objections fall away as US shale experience and pressure to capitalise on the huge economic benefits the Beetaloo offers swing sentiment.

[loganair] 22/2/2017 09:31

thecynical11 - sorry I should have made it clear, the qualification in brackets is mine and what Falcon themselves have often mentioned that they do not tend to take Beetaloo into production.

[thecynical1] 22/2/2017 05:55

and I really like this one...... : )

hxxp://www.ntnews.com.au/business/prime-minister-malcom-turnbull-wants-northern-territory-to-develop-onshore-gas/news-story/9aa0a22cc4b246687ef1e98e3ee50f90

[thecynical1] 22/2/2017 05:53

Interesting article about who else is looking at the area.

hxxp://www.smh.com.au/business/energy/gas-entrepreneurs-bet-on-beetaloo-basin-as-australias-answer-to-us-shale-20151231-glxgwy.html

[thecynical1] 21/2/2017 12:32

falia.....fxxx off.

[falia] 21/2/2017 12:13

SYM GUYS DONT MISS OUT

[falia] 21/2/2017 11:23

SYM LOOK AT IT GO

[falia] 21/2/2017 10:22

SYM GUYS RISING FAST

[thecynical1] 21/2/2017 09:53

funny there aren't more people on here? the excitement looks like it is just about to really start.jmo.

[thecynical1] 21/2/2017 09:44

intetesting again this mornimg....

[jlondon] 20/2/2017 19:21

"Prime Minister Malcolm Turnbull wants Northern Territory to develop onshore gas."-NT News, 19 Feb 2017

External preamble:"Australia has to develop more gas and the Gunner govt is depriving Territorians of a rich resource and the prosperity that comes with."

Note: There is a paywall. However, if one types up the title into the search engine, one can read the preamble.

[jlondon] 20/2/2017 19:17

"Gas:Forgotten in energy debate."-Abc.net.au 20 Feb 2017 [14 hrs ago]
www.abc.net.au/news/2017/-2-20/gas-forgotten-in-energy-debate-8285264

Highlights:
"Debate around Australia*s energy security is intensifying especially after the recent blackouts and big price spikes in South Australia and Queensland.

Earlier this month, Prime Minister Turnbull said increasing gas supply was "vital for our energy future."

We have some of the world*s biggest gas deposits, by 2021, we*ve set to become the world*s top exporter of LNG OVERTAKING Qatar."

[jlondon] 20/2/2017 19:09

"SMALL CAP SHARE IDEAS: Falcon Oil and Gas soared 170% in a week after a discovery Down Under."-This is Money, Mon 20 Feb 2017 www.thisismoney.co.uk/money/investing/article-4242262/SMALL-CAP-IDEAS-Falcon-shares-soar-170-week.html

Highlights:
"Numbers involved are mind boggling. The analysts that follow Falcon,were, frankly, stunned by the numbers. ..but the numbers used in the Origin statement focus on 1 gas bearing zone.There are,however, two or possibly even three gas bearing shales that could be economic."


"WH Ireland:In our opinion the scale of the resource is much greater than we had anticipated..we believe SCALE attracts CAPITAL..the resource is clearly strategically significant for energy importing countries. It would move the dial even for big LNG importers."

"However,the scale of the Origin discovery is likely to crystalise the thinking of the law makers of Northern Territory. There are positives too-and a scenario under which the numbers quoted UNDER-ESTIMATE the scale of the discovery."

"The downside as stated above, is the inquiry currently taking place into hydraulic fracturing. The plan is to publish an issues paper by the END of the month followed by an interim read out mid-year and a final report of the end of 2017."

"On Mon, the share price was MARKING TIME at 15p. Now this is POCKET LINT for a BIG INTERNATIONAL CO looking to replenish its gas reserves."

Note: Please check. If link does not work, please enter title into search engine.

[thecynical1] 20/2/2017 14:12

obviously a winner, then.....!!! LoL!

[peter anthony] 20/2/2017 13:54

Have checked out Rupert Hargreaves profile and ratings. Out of 88 recommendations he has made 43 were successful with an average return of 1.8%. Would that inspire you??

[thecynical1] 20/2/2017 11:46

Funny that this guy mentions that it may be years before Falcon beings production.....and then immediately qualified that statement......nobody thinks that Falcon will go to production - that is not their business model. The question here is when they get taken out and at what price imo. Even with the 6.6 TCF Hargreaves mentions, their share is nearly 2 TCF. Look at what Cove got for their share way back when. Makes you wonder?

[loganair] 20/2/2017 09:55

By Rupert Hargreaves:

An enormous prospect:

According to the Q&A and the data published by the firm mid-week, the 16k square kilometre (around the same size as Wales) Beetaloo Basin prospect holds a prospective 496trn cubic feet of shale gas, which works out at around 82bn barrels of oil equivalent. However, these figures are ‘best case’ numbers and the potential recovery figure is only 85trn cubic feet, around 16% of the total.

Of this, 6.6trn cubic feet has been classified as contingent resource across an area of just 2k square kilometres. Contingent resources are estimated to be potentially recoverable from known accumulations based on current assumptions.

On the road to growth:

These figures are fairly vague and there’s still plenty of work to be done to confirm that the resources below the surface can actually be extracted profitably. Still, it’s very clear Falcon is sitting on a huge resource base and the market is marking the shares higher as a result.

That being said, it could be years before Falcon begins production or generates sales (Important to note Falcon say they do not intend to bring into production, rather to Sell the 30% of the license they hold once the reserves are proven.) Oil & gas exploration is a notoriously unpredictable, time consuming and expensive business and while Falcon may look well positioned to extract profit from its massive discovery today, over the next few years the company may struggle to turn its dreams into reality.

With such an unpredictable road ahead, there’s no need to rush to buy shares in Falcon.