December presentation Q&A session info FYI I don't get why the drop today especially with good news from near by operators
Regardless, as an FYI here is some info from the December presentation and Q&A session provided by CEO O'Quigley. Most of the information is included in the company presentation at falconoilandgas.com, additional comments in random order include.
-Falcon's plans are and always have been to monetize (sell) their holdings in the Beetaloo-not interested in being the operator
-Falcon can't claim to be in the core area of the Beetaloo, no operator can as of yet, but commercialization looks good for the area that they are in
-it will take years to explore/establish the potential size of the NG resources in the Beetaloo. When asked how big could it be, David Close ( I believe that he is with Origin) is paraphrased to have said " (for now) it's like trying to guess the size and weight of an elephant by examining one of its toe nails"
-question- what is the value proposition of Falcon's holdings in the Beetaloo: paraphrased answer " it's hard to say but prices for similar shale gas plays in the US have fetched $1000 per completely undeveloped unexplored acre. Falcon's 22% share of the land is approximately 1 million acres.
-if and when commercialization is established infrastructure is already near by to get product to market. Domestically via existing pipelines, internationally to Asia via terminal at Darwin operated by a Japanese firm (NG in Australia $8; in Korea and Japan $30)
-Falcon has sufficient funding for Origin to complete most if not all 2022 drilling. No immmediate need to raise capital
-Falcon does not qualify for any of the current drilling grants being issued by the Australian government
-the Australian government wants a total of 200/300 wells drilled -all operators- in the Beetaloo by 2025 ( Falcon believes that that is not achievable but nonetheless the goal speaks to the government's desire for success)
-the wet season in the Beetaloo runs until April/May, don't expect much in the way of drilling until then.
-They hope to monetize their holdings in 2022/2023. The plan is likely to sell the whole company not just the or an asset. ( apparently tax wise, that works best)
-question asked.. are you seeking a buyer or are you sitting back waiting for a suitor...paraphrased answer..." tough question, you want to stay in control of the timing of the exit, you don't want to go too early. We want to make sure that all of are ducks are in a row first. If there is a declaration of commercialization there will be plenty of big suitors looking at Falcon. However that declaration requires that all operators be successful in their exploratory drilling and that NG prices remain high.
-O'Quigley believes that by the end of 2022 the question will no longer be whether or not the Beetaloo gas exploration will succeed but rather... how big can that success possibly be.
All that said remember that there are a lot of groups, landowners etc fighting against fracking in the Beetaloo. Beyond the carbon reduction demands, transition to green and indigenous land claim disputes their are also environmental groups concerned that fracking will pollute the ground water.
But Australia needs the gas and a compromise may just be reachable. There is always a risk in investing, some think Falcon is worth the risk