Falcon Oil & Gas (LSE:FOG) — Falcon’s Stage 3 Beetaloo Work Program and a discussion on the latest developments in the Beetaloo

0:01 Good afternoon, and welcome to the FALCON OIL and GAS investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time via the q and a tab situated in the right corner of your screen. Just simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company will review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, I'd like to submit the following poll.

0:30 And I'd now like to hand you over to CEO, Philip Ho Quigley. Good afternoon to you. Good afternoon, and thank you for that, and welcome everyone wherever you are. I'm gonna go through just a pretty short presentation today, because I wanna spend more of the time really on some great questions that were submitted prior to this meeting. And and thanks everyone in advance for submitting any questions, which I hope it came to address most of them. But just let me just jump into it's only a few slides of a presentation, just to talk and and kind of refresh everyone where we are. What I'm talking about today is our acreage in the Beetaloo position, in the Beetaloo Basin in Northern Church, Australia, about 600 kilometers south of Darwin. The blue you see on on screen, representing three exploration permits, which we, together with our partner, Origin Energy, own, you know, 4,600,000 acres. So it's quite an extensive, position within the basin. It's about the size of Wales, if you're thinking in terms of, you know, your own geography or Leinster in Ireland. So it's a vast area, and our net 22 and a half percent of that is a huge 1,000,000 acres roughly.

1:38 While I'm on this, just to draw your attention to a couple of the blocks around us which are of significant interest, E P 161. You may have seen results there by Santos through their junior partner, Tamron, announced about a couple of weeks ago. Pretty encouraging results, actually. I'll talk a bit more about that because there's some good questions on those results later on. But they did drill two horizontals, fracked them, flow them, and they announced initial flow rates from those, which are, as I said, very encouraging. This year is gonna see an increased level of activity across the basin. We've got a testing of a well here by Empire. That'll probably be June or July event. Tambrin have 100% of this EP one thirty six. So they're gonna be drilling a well, a horizontal well here, probably splitting that in June of this year. And then what I wanna talk today about is what we're gonna be doing in 2022, which is basically going back here to drill, another two big, wells.

2:35 Just looking, same map just in terms of a depth view of, the Beetaloo Basin. This is our Amunji well, the horizontal well, the first horizontal well drilled in the basin back in 2016. We went in and tested this well in, September last year, and that was really encouraging results at about a fivefold increase in flow rate. These two Tanambarini wells at one h sorry. Two h and three h were the wells that were drilled and flow tested a couple of weeks ago and at least announced the results were announced. And then this is the Maverick well that Tamber will be drilling and then the Carpentaria well. That gives you kind of an aerial view in terms of this depth here. For us, it's about two and a half thousand meters. You get over to the deeper part of the basin here at three and a half thousand meters, and then we have this shallower here in around about 1,900 as was our really good, exploration level carry 76 last year.

3:32 So let me talk a bit more detail on what are we doing this year. So first thing out is around about early May, late April, We'll be out acquiring 40 square kilometers of three d seismic in and around the Mungi area. So that's the first, order of work part of the 2022 and stage three work program. And then we will follow that up with the drilling of two two thousand plus meter horizontal wells from the same amount Japan that we had the success on our first horizontal. We'll obviously then do a frac stem on both of those wells and then run a production test, which will run into the new into 2023, ninety days, and maybe as long as a hundred and eighty days, to get a full, detailed analysis of what the, decline curve looks like and, hopefully, you know, what ultimately what an EUR, an an estimated ultimate recovery, on a well could look like in the future. All the work we'd be doing alongside, you know, the big part of the program of seismic and the drilling of the two wells is obviously going back to our very successful 76 well and carrying out, you know, a lot of detail analysis.

4:39 We did acquire 93 meters of core while drilling through the Velcari, last year. So that's in Houston being analyzed right now. And then we'll do further evaluation of the Koyala well, which is a well that we still bit puzzled as to why it didn't flow and didn't work, but certainly, ours are not giving up on this well. We've got quite a lot of work ahead of us in terms of trying to get a better understanding of what happened at Koyala. The objectives of our 22 program, as it pertains to our drilling and seismic, well, the seismic really is optimizing the horizontal well trajectories, you know, and identifying, for example, natural fractures and being able to orientate the wells, you know, to avoid any natural fractures and avoid what we encountered back when we drilled our 26 horizontal well, and we have that casing deformation issue.

5:34 So that's a great you know, having the three d in advance of our horizontal drilling would be a huge benefit to, as I said, orientating the well trajectories. The two wells themselves, you know, why people are asking, why are you drilling two wells off the same path? Have you already proven up this area? Well, look. We've proven it up to a certain extent. This is a case of going back and doing it even on a bigger scale, so we're gonna go to at least 2,000 meters. Depending on the welling the the drilling is going at the time, we might go beyond the 2,000 meters, and that's in each well. And this will obviously help us demonstrate, you know, the real scalability, being able to do longer laterals, and then how cost effective it is, in fact, to do, you know, more than two wells on the same pad. So all building to, hopefully,

6:19 what would be, you know, pilot development programs into '23 and then stepping up even further. So that's kind of the backdrop in terms of the, the program. All the great news going on certainly around this part of the world, relating to, you know, the gas market, which has become of significant interest internationally, in fact, well outside beyond, Australia. And largely because, you know, Australia is now the largest exporter of LNG in the world. So Europe are looking to, Australia to solve some of their energy worries and a pending crisis depending what happens between Russia, Ukraine, and so on. Gas prices here are at an all time high. Santos, I think they sold all 11 of their car was in in q four last year through Darwin, which is only 600 kilometers up the road from from the. They sold those at an average price of $29 an MCF, which is, you know, equivalent to a $180 oil. It's about seven times the same price for gas in The USA. So we're in a great place geographically. We have a huge market both domestically on the East Coast, but also North, into the Asian market. And with this kind of pricing environment, it makes reaching our goal this year or certainly at the end of stage three program, our goal of of a declaration of commerciality in some part of the beetleu much, much more attainable.

7:45 So I won't go further than that in terms of, the presentation. I think if we can just maybe jump over to the q and a, there's about 20 very good questions that were submitted. And if I maybe just I'm back to Alessandro to put those questions to us, and then I can hopefully answer most of them. Perfect, Philip. Thanks very much for presentation. Ladies and gentlemen, please do continue to submit your questions using the q and a tab situated in the right corner of your screen. But just while the company take a few moments to review those questions submitted today, I'd like to remind you that recording of this presentation along with a copy of the slides and the published q and a can be accessed by your investor dashboard. Philip, as you just said, we received a number of pre submitted questions from investors, and I wanted to start the q and a session with with these. The first one reads as follows. Is there a challenge with the geology?

8:31 Our initial frac at was only partial. It seems that was only partial too. What precautions are we going to take to ensure that the plan new horizontals don't suffer the same challenges? Yeah. Look. Geology by its its very nature, it it's always going to present challenges. Geology in the, you know, it's it's no different in that regard. I can't really comment in any great detail about the challenges that Tambora encountered. But at Mungie, you know, we did suspect way back in 2016, we had a casing deformation, which was caused by a natural fault in the reservoir, and that limited production. The test we ran back in August last year confirmed this, and Origin was then able to, you know, announce a normalized flow rate measured over, you know, effectively 1,000 meters of around 5,000 MCF a day.

9:23 This year, you know, prior to drilling the two wells planned, we're going to be shooting, as I said earlier, 40, square kilometers of three d. And this will allow us to identify these, natural fractures if there are any, and then orientate the well away from them. And that then hopefully will reduce the risk of the encounter in terms of this case of deformation, and then have a much, much bigger and better result as of, out of that. That's great. A shorter question here. Will you need to raise any cash this year? Yeah. Everyone loves to ask that question. We're we are a resource company, an e and p company, but we're a very, very fortunate position. Our last reported cash balance, I think, would have been September. I think we're around about 9,000,000 US dollars. And as stated in our press release last month, between the balance of the carry, you know, Origin have been paying their way since 2014 through various, carries that we negotiated with them as part of the farm out, there is still a significant balance of that carry left where our origin are paying a 100% of a certain amount up until, you know, the carry is exhausted.

10:25 But between that carry and our own resources, you know, we are fully funded for for the remainder of 2022. So the answer to your question is no. We don't need to raise any money this year. Thanks for that, Philip. In your view, is it likely that your existing 6.6 TCF re resource estimate will be increased in the next few months as a result of yours and others' recent drill results? Yeah. Good question. I I get this one a lot actually and for for a good reason. You know, we did, demonstrate a fivefold increase in flow rate back in September. So people would naturally jump to a conclusion. Well, a five fold increase in flow, what does that do to increase your resource resources? Simple answer is actually not a lot. And the reason is the area of extent which we applied, you know, the the workings and calculations to come up with the 6.6 TCF, that hasn't increased.

11:18 The area the area of extent of one eighth of our total acreage, that remains the same. What has changed or what will change in the near future, you know, subject to getting good results at the end of the '22 program combined with all the other information we have, what we hope to see is a reclassification of a lot, if not all, of the 6.6 TCF of contingent into reserve. And that will give you a huge increase in the value proposition for FALCON without any necessary increase in any volume. That's perfect. The next question comes from a long time believer who asked, what is going to what is it going to take to see FALCON stock price higher? Is the goal to produce one day to achieve higher price or to continue an exploration and development only? Yeah. I love this question. Yeah. Keep believing.

12:04 Definitely. 2021, that was probably our last year, of exploration in the. And I, you know, I ranked the the Valkari 76 as a as an exploration well and a very successful exploration well. Yeah. Our work program this year, it's focused around the Mungi, you know, an area we've already explored until somewhat has already even been appraised. So this year's work, you know, assuming success should actually lead to pilot production in 2023. But I think it's important to point out it's not necessary to get into production to have a significantly increased value that that will be reflected in our share price. You know, real production you know, pilot production might be the end of twenty three into '24. Real production is '25, '26. We don't need to be anywhere close to production. We need to prove it up and to get to this notional concept of, you know, declaration of commerciality, proving up IP flow rates of, you know, between two and three million scuffs of gas a day measured on over a thousand meters over, you know, the first thirty days.

13:03 That will change the value of FALCON long, long before, years before we're in full scale production. So keep believing. Thank you. The next quest next question reads as follows. I purchased under FOGF years ago. Are my shares still a recognized position? Yeah. The FOGF, it's on the kind of the I think what do they call it? The pink sheets. It's an unregulated, exchange platform in The US. I don't know a huge amount about it. I know there's many shareholders who actually own their shares through it, but you'd have to talk directly back to your own stockbroker just to know where you stand with those shares. There's nothing to be concerned about. But, you know, I'm more familiar with the TSX fee and, the a market that are the two regulated markets that our shares have traded on. But I don't I've never heard of anyone having a problem with shares on the FOGF platform.

13:54 Thank you. Philip, could you provide a brief outline of what additional work slash slash research the JV might undertake in 2022 on the on the Kalla? Can one assume as part of the additional research, the partners are talking to subsurface dynamics in Canada and or other firms, with similar expertise? Yeah. Look. I I think as I've I've said before, Kaila is and remains of significant interest, to the Origin JV. And Origin, certainly, they'll leave no stone unturned in in researching the Kaila and trying to get a better understanding of why it didn't flow, on its own. We we went in with with, nitrogen on three different locations. It worked for a while, but we could never get it to sustain a flow rate long enough to put it on an extended production test. But as I said, Origin are are committed to doing the work this year to get a better understanding. Whether they talk to subsurface dynamics, I mean, they may, but they'll certainly be talking to everyone they can to get a an expert's opinion on on what could unlock the Kyala because with the Liquus content we have here, it is of of significant interest and will remain so for some time.

15:02 That's great. Can one assume that FALCON can put off for another twelve to eighteen months amounts payable to count to cancel the royalty payment would the cost of an extension again be the equivalent of a similar financial charge? Yeah. So, look, for the benefit of of the listeners who are not familiar enough with, the overriding royalty regime, FALCON does have a call option to acquire and extinguish a 2% privately held overriding royalty on our acreage. It's a call option, so it's up to us if we wanna exercise our call option. And the cost of exercising is 6,000,000 US dollars, which we could choose to do by the April 30 and then extinguish that 2%. We previously acquired and extinguished 5% of an overriding royalty from that same privately held group of families way back in 2014, and we also acquired and extinguished a further 4% overriding royalty from a a private family, based out of Zurich, and that was done also a number of years. So we did have 12%.

16:01 We're down to 3%. We probably may. I don't know what we'll do, but we haven't actually made any decision what we're gonna do. We make that decision, you know, closer to the April 30, whatever we, you know, take you know, buy out the call option, extinguish it. Do we go and renegotiate an extension, or do we just leave it as it is as the royalty and and come back to some other day? But no decision will be made at this stage. Thank you. The next question asked if you were able to disclose what is the total budget in 2022 for phase three of the Origin slash FALCON program. Yeah. So Origin of the operator, you know, they're the one that put the budgets together, but they don't break out in their own financials, the detail of the CapEx of 2022. So we're not at liberty to be able to, you know, disclose the exact 2022 CapEx.

16:49 So, you know, the stage three program, as I've outlined, you know, it's a pretty robust one. It includes, as I said, the acquisition of the 40 square kilometers and drilling of two horizontal wells. You know, it's a big program, but at least, you know, we are fully funded for all of 2022, which is which is great news. Just turning to the next question. Since the original press release last November on the preliminary petrophysics and mud gas composition from the Valkyrie 76 s two one vertical well. Are you in the position to share with us any additional findings that have come to light since? Yeah. So, look, again, for all listeners who may not be up to speed, we announced back in, what was it, October, November, petrophysical details of our Bell Carry 76 well.

17:36 And it was particularly good, especially when you look across, you know, however way you wanna look at it, you know, the greater than 50 meters, thickness of the b shale, the porosity at 7.7%, total organic carbon, the TOC, at 4.3%. So it was a fantastic well. During the drilling, we also acquired 93 meters of core. That was then shipped to Houston. That will be in a you know, analyzed over a period of about six months, so we haven't got any of that back yet. And then we'll we'll update. We don't have anything up right now to update the market with, but we will update the market as soon as that, you you know, we're in a position to do so. And, you know, in the meantime, Origin ourselves are really, really excited about Valkyrie seventy six and the surrounding area. Thank you very much.

18:22 The next question says that there's been lots of publicity in the recent weeks from Origin and Santos on the extraordinary high spot prices obtained from the LNG cargoes. Could you advise us where longer term fixed price contracts are trading? And if the latter are maintained, in what way might it impact analysis and government views on the future commercial development of the beta loo?

18:45 Yeah. Look. Thanks for this question, actually. It's it's another good one, and I've touched on it already, you know, in terms of the pricing. Origin did sorry. Santos did get an average of $29 for for q four for all of its shipments, not just one, but for all of its q four shipments out of Darwin. Woodside and Origin achieved similar pricing prices for their LNG cargoes during the same quarter. And, you know, all operators basically are enjoying the benefit of these higher prices. If you look at the kind of the benchmark is the JKM, it's the Japan, Korea marker for LNG. I think going out to March 23 next year, it's somewhere between now it's it's between 24 and 28 US dollars per MCF. So these extraordinary high prices look set out into the future, which is really, really good news for anyone, looking to develop a Bitadu.

19:37 In terms of government views and support, you know, with huge support, locally and federally, and, that has been growing in recent years and now even more so in recent months. This pricing environment will will do nothing except to enhance the the views and the and the support coming from government and also enhances our own view in terms of the real commerciality of the beta loop. In a pricing environment like this, it gets very, very easy in terms of what you need for flow rates and EUR per well. This kind of a pricing environment makes it, you know, a very, very achievable, task indeed. Thank you. Just turning to the next question, which says there have been some questions raised about the recent five millimeter cubic feet slash day estimated flow rate from the Amunji h one well.

20:26 How confident are you and Origin about this very commercial flow rate with only four of the last 11 fracs contributing 85% of the actual flow from that well? Yeah. But this is actually a really this is probably a super key question to to ask. And, again, thank you for submitting it. When we went back to test the Mungie well, it was done on the hypothesis that we had, what we call, a casing deformation called by a natural fracture, that we thought and suspected might have limited the flow of gas from an area beyond the deformation. And I guess to understand, you know, the implications of a deformation, think of what think of a deformation as someone, you know, standing on your garden hose, as you're trying to water your garden, and all of a sudden, the flow of water is is down to a trickle. Well, that's, you know, what we suspected was the case.

21:14 And when we went back in, we ran a an engineering tool with with Schlumberger, which simply measures the velocity along different take points of the wellbore. Now I'm not an engineer, but I'm I'm told by the engineers that it that it is exactly that. It is engineering. The data doesn't lie. It's there's hardly any subjectivity involved in the analysis. Schlumberger did a very detailed report for Origin. Origin did their own work on on on the data that came up, and in fact, hired a third party. So all three entities all concur with what we announced and Origin actually announced in this five fold increase or the 5,000 mcf a day as posed in the question. And as to how confident we are, well, I think based on on all three coming up and concluding to the same, I think we're pretty confident that it's a real number. It's not a it's not an extrapolated number. It's it's pretty real. Having said that, we still do need to go back this year and drill these two two thousand plus meter wells, you know, to prove it up on a much bigger scale. I guess we can do it, and it's not just over 200 meters, which is the case for our twenty twenty twenty sixteen well.

22:19 Thank you very much indeed. Just moving on. How soon do you expect Origin to announce that they have a drilling rig secured for this year two well drilling program at Mungi? And can you explain what a hot rig is Mhmm. And why that would be preferred booking for this year? Yeah. The hot rig topic. Look. First of all, we'll the market on on key operational issues, as we progress, through the year. Maybe not down to the level of detail of signing, you know, rig contracts. But rest assured, you know, we have we have our our eyes on a rig negotiations of I can't remember where we are. Well well advanced or maybe even have been executed. And it's not a cold rig. And what a cold rig is, to answer your question, a cold rig is a rig that's been lying idle in a yard, and it's a bit like Humpty Dumpty. Somebody comes along and kinda puts it back together again.

23:11 Hopefully, there's no missing parts, more or out to out to the field. And then you gotta go and find a crew, most of whom have probably never operated on the rig. So you got cold rig out in the field, hasn't been tested for a few years, but the crew that never worked on it. And, that's the nature of a cold rig. A hot rig is one that's been operational for the last twelve months, and you're simply mobilizing a rig onto side with the crew that had been working on it for the last twelve months or even longer. That is your definition of a hot rig. In terms of our preferred booking, well, when you're trying to run a program in what is, in an oil and gas world, a pretty remote part of the world, and by that, I mean, we're two and a half thousand kilometers from the nearest oil field. So, therefore, we're two and a half thousand kilometers from the oil field services companies.

23:59 The last thing you really want, in any

24:01 way is a cold rig. So our preference is most clearly to go for a hot rig fully crude and ready to go. Thanks very much. The next question comes from an investor who asks if you could give your thoughts on the Santos recent flow rates and how that impacts all operators in the Beetaloo, and whether you think these Santos flow rates will impact their overall plans for drilling in 2023. Yeah. I'm not sure if Santos themselves announced the flow rates. It would have been their partner, Tamburin, certainly the one I've seen. And Tamburin indicated, you know, a normalized flow rate over a thousand meters of around about 2,500 mcf a day. That's a pretty good result. It's not just my view. I mean, I've spoken to many people on on these results far more technically able to interpret it than I am when I've spoken to Origin. These are good results at this stage of appraising the.

24:52 And, you know, let's talk about future optimization of fracture stimulation, which will come and learning will improve, and optimization of frac will enhance flow rates going forward. As to what Santos are gonna do in '23, I have no idea. I mean, I couldn't answer what they're gonna do other than that maybe guess that on this level of success that I think is success, they might like to look to do what we're gonna do in '23 would be to step up to pilot development program around their tunnel and burini wells. That's perfect. If FALCON sells their 22.5% share of the B2B, how will this be distributed to shareholders? Yeah. So, look, if we just simply sell the 22 and a half percent individual, as in selling up the assets, to a third party, just, let's say, for a thousand, the first distribution will be a tax distribution to the Australian authorities to the tune of 30%, I e 300.

25:50 We then distribute 700 up to our parent company, Canada, and make a second distribution to Canadian tax authorities of about another 30% or 210. So we've been left with, you know, rounded up 500 of a thousand, and then we'd make a distribution to our shareholders by way of a dividend so you can all pay 50% income tax on the dividend. But we won't do any of that. There won't be distributions at the tax authorities across Australia, Canada, and dividend income tax to our shareholders. You know, our view and the work we have done and the work that my CFO, Anne, specifically, has done in terms of structuring the company that when we look to sell or somebody wants to buy our 22 and a half percent interest in the beta, they buy the company, the topco. And they simply just acquire your shares your shareholder shares for cash, and you pay your capital gains tax on that. There'll be no issue of distributions by FALCON.

26:46 That's great. The the next question asks if Origin, Santos, and Empire are working together behind the scenes to share intelligence and data to help the b two d calls. Yeah. You know, when I talk about future optimization of fracture stimulation, it's it's beyond that. It's future opt optimization of everything to do with developing the beta loo. You know, we all get smarter, you know, individually as we go along and learning from our own experiences. Collaboration between all operators is can only be good, and it's something I'm very keen to promote and actively promote in the between Origin, Santos, Empire, Tambern, and ourselves. There is a lot of collusion in in talking and chatting. We all know each other pretty well. It's not, you know, as some might think as a competitive environment. We're selling gas, which is now an international commodity. It's not like a domestic commodity anymore. It's an international commodity just as oil is into a very large market. There's no need to look upon each of us to look as as competitors to each other.

27:48 So the more collaboration that goes on, the better. And as I said, we all know each other. It's not even it doesn't even have to be behind the scenes chat. I mean, we can all kinda openly share you know, data is in a service sense. Yes. But you can easily have arrangement between various companies. You show me yours, and I'll show you mine. So if if we have, for example, two well results this year and Santa say, well, look. Could you show me the results of those, and we'll show you and, you know, why wouldn't you? So that will be something we all work for because we'll all benefit from it, for sure. That's great. Just turning to the next question, which asks if this year's operation is successful, what valuation would this give for our acreage? Mhmm. Yeah. It's a good question.

28:34 Mostly around North America, shale plays tend to change hands, and they're always, you know, comes down in the market in terms of the the deal that was done on a dollar per acre basis. It's just been the the way it has been for for many, many years. And we follow this quite closely, actually, with our our broker, Saint Cost, in fact, keep a full track of all the m and a deals going on in North America, and they can quite, you know, confidently tell me that exploration acreage typically chart changes hands of a thousand dollars, appraisal acreage changes hands of 4,000, and then producing proven and producing acreage can trade change hands at around $12,000 an acre. You know, in terms of your question, you know, on success, we'd like to think, you know, our area around Mungi is now in that appraised success at the end of stage three. But that's not all our acreage. Let's let's say we apply that to the one eighth, which is the same aerial extent of the numb of the the acres we applied our resource calculation to. But you could, you know, rightly assume that one eighth of our acreage and our net acreage, for example, is is a million acres. So on eighth of that, you could apply a value as high as $4,000 per acre, but not for all of our acreage, but but for, you know, the one eighth. The balance of the acreage might still remain in that exploration category, but it'll have an enhanced value because it'll become, you know, real exploration as opposed to maybe exploration. It's you know, you know, because we're now in a much better address. If we have success at Amunji, the value around us will also

30:04 increase, but not to the same extent as to the area directly around Amunji. But either way, you know, all the drilling that goes on improves the value on an acre basis. And, you know, right now, we're trading at, you know, something like a 100 or a $150 an acre for our current acreage, which is very, very, very low valuation indeed. That's great. The next question relates to Santos and reads as follows. At the end of last year, Santos got in itself into difficulties with its landowner. Do you envisage Origin slash Falcon getting in similar difficulties? And if and if not, why not? Yeah. This question refers to a case between Santos and the owner of the Tanumbirini cattle station, a a called the Rollin Australia.

30:50 Rollin accused Santos of failing to meet strict obligations in terms of disclosing their proposed drilling of two horizontal wells, and a decision was handed down in favor of actually Rollins claims in a court back in December. Look. Origin has a really, really good track record, as does Santos actually, have a really good track record in terms of dealing with all stakeholders. Mistakes like perhaps Santos made can happen, has happened, could happen in the future. When I was farming out, the in 2013 and '14, I was very cognizant of Origin's track record for stakeholder engagement in Queensland, where they're drilling, you know, up to a 100 wells a year. You have to be on top of your game in terms of stakeholder engagement.

31:37 And what I've seen, you know, in the work that they've done in the in the Northern Territory, the kind of work I've seen, particularly, you'll all have seen the work that they did in terms of the pepper inquiry. And if it wasn't far origins input into that and how they manage all stakeholders during that process, we might not be out the other side of the moratorium. So you can still have a slip up. There's no guarantee, but Origin invest, again, as does Santos and all the operators, invest a huge amount of resources, time, and everything else, and rightly so, in engaging in all stakeholders. So I wouldn't I I the likelihood of a difficulty is is low is what I can say. You can never be, you know, completely at zero, but it's very, very low. Thank you very much indeed. Just turning to the next the next one. In October, November last year, were briefing investors that they envisaged by the end of the first quarter this year, they would be in a position to dictate how, when, and where infrastructure should be created in the basin in the next two to three years. There is less talk of this last week.

32:40 Do you think this is a reflection that most of it, if not all players now realize, given the size of Origin slash Falcon property, this in reality was always the case. And from Falcon's standpoint, does this impact future values? I wasn't I didn't attend the the investor briefing where Tamron may have made the claim that they're in a position dictate how, when, and where infrastructure seems a bit of a stretch for any company at this stage where the deal was at to me making such claims. You know, by infrastructure, presume the person asking the question, you're talking about pipelines in particular. You know, there's two big pipeline companies operating in Australia. APA, which is the Australian owned entity, and then you've got Gemini, which is owned by State Grid, which are, you know, the largest utility company in the world. They'll build whatever pipelines need being built. That's their business model. That's their game. They're in the infrastructure game.

33:33 And if you want a pipeline from, you know, the Beetaloo all the way to Adelaide, you know, they'll they'll build it if you provide, you know, a guarantee to deliver gas down and then pay the tariff. That's what we'll our commitment would be, you know, if we're building is is is to agree to a certain tariff and a certain volume of gas to go through the various pipeline. But I don't think it's it's a bit early stage to be dictating, where and when these are gonna be built. But I know, we all have a good relationship with the pipeline companies who build, the pipelines. There's enough LNG facilities on the West Coast, the East Coast, and, obviously, even close to us in Darwin, where we can move huge volumes of gas. So getting that to the market with the pipeline companies is actually gonna be quite easy. And, you know, in time, they will be there.

34:18 I I speak to them, and, you know, they're up for it. As I said, it's what they do. It's it's their their gig is is building infrastructure, and then we'll end up paying the tariff for moving the molecules of of gas up the pipeline to market. That's great. And the final presubmitted question reads as follows. Empire's 1,345 meter carpenteria two h horizontal well was completed last year and will be fracked this year when the wet season ends. Given its location, how important do you rate their success for the Origin slash FALCON project? Can one assume it's in the three in the three companies' interest to swap data and when requested? Yeah. I I've answered part of that question already in terms of of sharing data. Of course, it's in everyone's interest.

35:06 And, you know, in terms of this particular well, Empire's Carpinteria two h well, all success in the is important to everyone. Their well, yeah, it's on the flank of the basin east of our, you know, recently well carried 76 wells. It'll have a much better read through to the 76 well than it will, for example, to our Humungi Wells or even, you know, to the Santos' town of Burini Wells. But independent of any successes, people say that we're we're really excited about our own 76 anyway regardless of the results that, you know, good or bad for Empire. We're hoping for good results from Empire. Regardless, we will remain extremely excited about our Valkari 76. More of, I guess, of even higher interest to us might be the Tambor and Maverick well, in close proximity to our Valkyrie seventy six. So, you know, all eyes are focused on that. And, again, hopefully, they too have success. Everyone success breeds success, certainly in this kind of a play, even more so.

36:04 Thank you very much, Philip. That concludes the pre submitting questions. And, Philip, as you can see, we've received a number of questions throughout today's presentation. And thank you to all the investors for submitting their questions. Philip, could I just ask you to open up the q and a tab and read out the questions and give responses when it's appropriate for you to do so? And then I'll pick up from you at the end. So this is where I can read out a question, but I don't like the question, and I have to give the answer. But no. I'm kidding. Yeah. So thanks, Robert f. Question. Do I have a realistic target date for Beteloop commercialization? It's not about Beteloop commercialization because it's a vast basin. It's about getting to a a notional declaration of commerciality, as I like to put it, which, you know, if we flow, you know, two and a half thousand MCF per 1,000 meter, so, you know, multiply that up. We're flowing 10,000 MCF a day from our two two thousand meter wells at horizontal at at Munchi by the end of that, drilling and testing phase. And I'm gonna say by the end, you know, by the end of the the first thirty days.

37:06 That to me is a declaration of commerciality, not for all the basin, but that's, you know, a a end of year q one event to to reach that point. So next question I have is Andy c. Any concerns about a change of government and changes to support policies? So the government the current the government, in power now, they were elected back in September 2016, reelected in and they're the ones who impose the moratorium. So they weren't the good guys. As far as I was concerned back then, they weren't. They were reelected in 2020. They are very supportive. We've embraced, you know, everything that came out of the moratorium, the pepper inquiry, all the recommendations. So the support, you know, is quite quite visible and very supportive.

37:51 They see all this huge increased level of activity that's gone on last year and again this year, you know, the notion of of the chance of real commercial success of the Beetleu in the not too distant future is of significant interest to all politicians of, either side of the aisle, you know, in what's called, the middle arm. The middle arm is is that that kind of piece that jumps out in in Darwin that holds the two LNG, terminals, the one owned operated by Santos and the other owned by Impex. They've got, like, $10,000,000,000 of projects ready to go there. A lot of those contingent on Beteloo GAS success. So I would say we've we we don't have any concerns about a change of government or certainly no change in in in the government support.

38:44 Will you put the colored map back up? Somebody's asking first. So let me just put the colored map. That's an easy one to do. I presume you mean this one here. Just Just in terms of this coloring here, this this blue, as I said, is our 4,600,000 acres. This brown is Santos Tamboran. This one here is Tamboran and so on, and a lot of the yellow is is Empire. So I think I hope that answers your your question. Another one from Water f. Time frame for exploration of the stacked plates, and the timing of that versus the sale of the asset. There's a really interesting question, actually. That's something I don't often talk about, but a lot of other, particularly North American people looking at the b to do have a real view on the stacked play potential of the b to do. And by that, I mean, you know, we look at the Valkyrie. We all talk about the Valkyrie b shell or the Emunji member b shell as it's now officially known as.

39:39 We don't often talk about the a and the c, and yet they're there. And the c is almost as good as the b. We are if fortunate everyone is focused on the b right now because I think a focus on one share is is great, but the c is there to be developed in this stacked play concept. And then you have, you know, shared plays at a higher, you know, in terms of depth that you can also bring in later on. But even in the Mungi itself, you know, the a, the b, and the c, the timing of that is probably, you know, a few years away. And I, you know, and I know what you're asking in terms of that versus the timing of a sale. You know, would we capture value, you know, on selling, you know, our share of the based on a Mungie member b only shale being, you know, categorized as commercial and and having booked reserves on it? Know, would we get values for the c at that stage? Well, you you certainly be looking for some, but you might get the same value you would for the b. And it's probably a few years out before we start looking at the the stacked play concept itself, but it's actually really it's pretty real, nonetheless.

40:46 So there's a few questions here I'm just glossing over because it's it's it really talks about, you know, the sharing of information between Santos, Origin and Empire, the two similar questions. And, you know, the answer is yes, and I'm, you know, actively trying to promote all collaboration. Question here, any news in the crew in South Africa? So for anyone who's not overly familiar with FALCON, we've got 7,000,000 acre permit known what's called a technical cooperation permit in South Africa in the Karoo, which we acquired, I mean, made that application in 2010. We are still waiting for that TCP to be converted into an exploration permit, but in advance of that, they have to put all the regulatory framework in place, and they still haven't got there. So, unfortunately, there's there's no great news, on that front. And I think that concludes, certainly, all the questions that I can see on my screen, and, I'll hand you back to Alessandro.

41:44 Yep. Philip Philip, thank you so much. You've been very generous with your time. I think you actually managed to address all the questions from investors. And, of course, the company will review any further questions submitted today, and we'll be able to publish those on the investment company platform. But just before redirecting investors to provide you with their feedback, which I know is particularly important to the company, could I just ask you for a few closing comments? No. I think the the the main closing comment is this is the year. This is the most exciting year in the the one billion year history, of the. I think Saint Costa's latest note kinda had a nice headline reflecting that. And it is for lots of reasons, you know, mostly because of of the two wells that we're gonna be drilling, and the longer reach laterals off the same pad. We're we're very excited, very you know, fairly confident of success, but also our neighbors, what they're gonna be doing. And then in the with the backdrop of this, you know, market that we have and the pricing dynamics of this part of the world, you know, all bodes pretty well for for continued and increasing success at the beta.

42:49 Thanks once again for updating investors today. Could I please ask investors not to close this session as you'll now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations? This will only take a few moments to complete and I'm sure will be greatly valued by the company. On behalf of the management team of FALCON OIL and GAS, we'd like to thank you for attending today's presentation, and good afternoon to you all.