Falcon Oil & Gas (LSE:FOG) — Investor Q&A

0:01 Good afternoon, ladies and gentlemen, and welcome to the FALCON OIL and GAS LTD. Q and A session. Throughout this recorded session, investors will be in listen only mode. Questions are encouraged. They can be submitted at any time via the Q and A tab that's just situated on the right hand corner of your screen. Please just simply type in your questions and press send. If I could please ask investors to hold off submitting any live questions until the team have addressed those, that were presubmitted just to avoid duplication, that would be most appreciated. And the company may not be in a position to answer every question it receives during

0:32 the meeting itself. However, the company will review all questions submitted today and publish responses where it's appropriate to do so, and these will be available via your investor meet company dashboard. I would now like to hand you over to CEO, Filippo Quigley. Good afternoon, sir. Good afternoon, and good morning to someone. Thank you, Jake, and thank you all the shareholders on this afternoon. You have myself, CEO, and Tom Lehman based in Austin, Texas who's our technical director, nonexec director. So, look. But, again, thanks and welcome, everybody. I wish I was here bringing you much better news than you probably would have read from our press release this morning. What the purpose of this meeting today is we did have our our AGM this morning. We had the the kind of the formal AGM, and then we had a q and a around this this press release.

1:18 My proposal for the next twenty or thirty minutes or so is to kinda just give you a quick overview of the press release. And there's a number of pre submitted questions on the press release, which myself and Tom will then handle those questions and hopefully answer them as best we can. And then we'll after that, we'll open up to the live session in terms of submitting your own questions. But Jake said, if you can just hold off a little bit until we've gone through the already presubmitted ones, it might cover some of the questions you do want to ask. So, again, apologies in terms of the news. It is a bit disappointing. We had and were, as you all know, hoping for this to be the well to give us our commercial flow rate, which we had said as FALCON, we were hoping to be in the in the range range of about 3,000,000 scuffs of gas a day or 3,000 mcf.

2:04 You know, when we drilled the well case, cemented it back, you know, literally almost before the Christmas Eve, We had a really, really good well, drilled, and we were pretty feeling pretty confident and excited. And then we went out in, March, April, fracked that well, 25 stages, and, again, feeling very, excited and confident about it at that stage. We put the well on production in early May, in the first week of May. And despite all of what had gone beforehand, we didn't see the kind of flow rates we had expected. And, also, we didn't see the kind of water recovery we would have expected to come back at the earlier stages that we've seen in our previous Amundi well and we've seen in other wells. So our our press release today is having, run a production test for the last fifty days or so.

2:55 But in the meantime, having sent some analysis back to a lab, and the lab actually is in Texas. Tom knows the lab, I think, pretty well. At least knows the the personnel and their and their sort of track record of being one of the top labs he would want to go to. You know, we we have, you know, as I unfortunate news in terms of the flow rate, but we think we know what the problems are. They are all around the completion process, And and we we stated category in our press release, it is not a reservoir issue, not any issues concerning the quality of the reservoir. It's more to do with the methodology completion techniques. You know? And and Tom will talk later on when we talk to some of these questions that have been submitted.

3:40 You know? And and as Tom, I think, has overseen the drilling and completion of something like 4,000 wells, you know, you you'll you'll always learn, particularly in the early stages, on how different ways and different methodologies of completion interact differently with different shale plays. And that's part of the learning plus process here. And the lessons, I think, what we've learned in this well combined with all our previous learnings in the beta loo, I think, will set us up extremely well for the forward program. And, you know, if there were mistakes made as opposed to just learning, I think we'll learn both from the mistakes, but also, you know, learn from our learnings if if you if you understand the difference. In terms of the forward program, you know, then that we do have a forward program. This is a bit of a setback. We do have a forward program. It's a two well program.

4:28 The first of those two wells is stepping out to an area it's about 60 kilometers south called Shenandoah. It will be off the same pad we used for the Kalla Well 117. So we have the convenience of being able to use that pad, but it's obviously at a completely different depth than than the Kalla Play. And it's deeper than, the Amunji, which is about 2,400

4:49 odd meters, and this would be 3,200 meters. So we're pretty excited about that. That is part one well of a two well program we'll be drilling this year, And the second well then is go back to Amunji. And, you know, going back to Amunji, I hope, demonstrates to people that there clearly is no issue with the reservoir, with the geology around the Amunji area. It was a completions issue. And, you know, that will take us, you know, into the end of the year while, hopefully, we're coming back with what should have been the news today in terms of commercial flow rates. And that is the objective of this new work program for 2023 drill two one thousand meter horizontal wells in two locations, complete those wells, get them on testing, and hopefully get results by the end of the year. And by results, I mean, you know, the results we've all been waiting for and our our, you know, bar, our hurdle for commercial flow rate on a thousand meters still remains at 3,000 mcf a day. So that's hopefully where we will end up by the end of this trading campaign.

5:51 And, we'll we'll update the market in the next couple of weeks. There's a few bit of fine tuning between ourselves and our JV partners. So it's all been agreed on principle, and, there'll be a formal approval of that in the next couple of weeks, and then we'll come out to the market to confirm exactly this is the work program give you a better idea when it's going to kick off, whether it is gonna be kicking off as soon as we can. We have a rig available in country, the h and p rig that Tamper brought into country

6:15 a couple of months ago. So we will be using that rig, and we will be drilling two wells this year. So we'll have plenty of activity. So I think that's kind of enough on the press release. If I maybe then just, start perhaps with the the q and a session. If I hand back to Jake. Jake, do you have some of those questions, I think, in front of you? Absolutely. And thank you very much for that, and Tom as well. Obviously, we did receive a number of presubmitted questions. So as you say before, maybe turning to those live ones, it'd be great to tackle these. And perhaps if we dive just straight into it. First question that we have here reads as follows. The well averaged less than a million a day. What was FALCON's expectations going into this well? Yeah. Thanks, Jake. Look. I mean, I think we've all said the flow rates, you know, that we had expected was going to be in the order of 3,000,000 a day.

7:06 And this was based on a number of factors. First, you know, we had the production log logging test results from back in September 2021, and they indicated flow rates over 5,000,000 a day. Secondly, as I said earlier this this afternoon, you know, we drilled, cased, and cemented a really good thousand meter horizontal section. And we knew we weren't going to encounter, you know, the issues that we had, for example, in the month you've on this around the casing deformation. And then we thought, as I said, we we'd executed a really good completion of the well, you know, tracking 25 stages.

7:41 But, yeah, it's it's certainly below our expectations. But, you know, in answer to the question, we did expect 3,000,000, and we're just 1,000,000. So, it is unfortunate. And, but ongoing analysis suggests, you know, that, you know, we we we think we know the the reasons for it, and we can move forward and hopefully deliver, you know, the success on the next one. Thank you very much for that, Philip. And perhaps just turning on to the next question, which asks, how significant is the lower than anticipated water recovery at 10%? And what level of water recovery would you have expected? Yeah. Water water recovery is, you know, that's that's part of the problem. It's not the main problem. You know? And but we would have expected much higher levels of frac fluid flowback, water flowback at these earlier stages. You know, only having 10% of many tens of thousands or hundreds of thousands of bottles of water pumped into the reservoir, that is always gonna hold back your gas flow until you get a certain amount of that lifted up. Is that 20% or 30%?

8:41 But, certainly, we're we're below expectations. You know, it's it's it's unfortunate. It's part of a problem, but it's not the it's not the cause of the problem. It's it's a symptom of the problem in terms of the completion that we didn't lift this amount of water. There's probably a few things you might have learned as well in terms of when we open up the well, you know, getting more assistance from the pressure within the reservoir to drive out water at a higher rate at the earlier stages. And, you know, we again, that's part of the learning process. So, yes, it's below our levels at 10%. We did like to see a twenty twenty to 30. Certainly, you might see a much higher gas flow. But as I said, it's not the root cause of the issues we're currently dealing with. Perfect. Thank you very much for that. Just moving on to a few questions that we have here, which is similar in themes. Perhaps we can take these sequentially.

9:29 The first question asks, can you tell us, more about the test results back from the lab?

9:35 I'll hand over to Tom for anything on lab. I think maybe, Tom, if you wouldn't mind, or related matters. Yeah. Certainly. Well, as as Phil said from the from the flow rates and and the water production, we knew that the, and some of the early work from the lab, we we got a pretty good indication that there was formation damage during the completion stage. The lab is looking at several different causes for the for the damage, and, and that's what we're waiting on for those results. Perfect. Thank you very much, Tom. And perhaps just sticking with that, another question that we have here asks, can you elaborate a bit more on the potential causes of the damage? Well, we need to we need to let the lab do its work first and then get with Tamron and and all the the the engineers and figure out the the right course of action the next course of action.

10:35 And then Philip will and and Tamron, I'm sure, will update the market as soon as we we have a a new plan. Thank you, Tom. And Philip, perhaps, just whilst we're on that, when do you next look to update the market? As soon as possible is the short answer. When will that be? Probably in the coming weeks, not months, certainly. Sometime in July, we'll definitely be back to the market. You know, the analysis in itself, it's kinda subjective. I mean, the guys that are doing the work, I mean, they are, as I said earlier, you know, they're top of the class on what they do. But, you know, analysis like this, it just takes time. And and even then, it might lead to, you know, some further requirement for more sampling and more testing, but it's not that it's gonna run forever, never, never. I I suspect we'll get back to the market in the month of July saying, look. But this is what we've we've, realized as as the issue, and here's here's what went wrong, or here's what we've learned on on the completion. So what I I will say at the beginning, you know, we'll update the market as soon as possible, which, yeah, will be July.

11:41 That's great. Just turning on to the next question that we have here. How sure are you, that this is not a reservoir quality issue? I cannot. Tom, can you Yeah. I'll I'll take that one. Yeah. To date, there's nothing we've seen that would tell us that it's a reservoir quality issue. We we know from the one reservoir was not an issue. And when we do we're drilling the two h, we had good gas flows, gas shows, pardon me, via the mud log. So that that leads us to think that it's not a a reservoir issue. You know, that it's likely a the skin damage caused by the completion process. And I know there's sure there's some questions as to what the heck skin actually is.

12:26 Skin damage is a reduction in the of permeability of the well in the near wellbore. It doesn't reach far out into the formation. So this is a near wellbore phenomenon and and that's what the lab is working to try to identify what those causes are and then what can we do to fix it. Perfect. Thank you very much for that, Tom. The next question that we have asks, what type of cleanup work, could be carried out, and when is it likely to be done? Yeah. Well so we're waiting on the lab analysis for for certain before we can answer that. And once they do identify some causes, potential causes, and there's never a firm answer or there's often not a very firm answer, but we need to evaluate those results and then look at what a potential cleanup operation would do and whether we would it would justify going back in to do the cleanup operation.

13:24 Thank you, Tom. And perhaps just sticking with you there, a related question asks, surely if the lab can identify the problem, you could do cleanup work to solve the problem and get the well to flow at rates closer to your expectation. Yeah. Everybody has expectations. That's right. But there's no guarantee that just because we identify the problem with that we go in and try to fix that we're gonna get 3,000,000 a day out of the well.

13:51 The big deal, the the real learning is getting the JV to understand the the problem and the root cause of the skin damage. And the real win is when we can on the going forward basis that we take those learnings and apply them to our upcoming wells as we you know, we're also looking at that a one h well pretty hard again to see if there's some things we can learn, to do differently as as well. So it's it's not a guarantee that that there's a fix, but we're gonna be a lot smarter than we were before, we think. Perfect. Thank you, Tom. And perhaps, Philip, if I may come back to you a question here that references, the press release and asks, how firm is the two well work program referred to in your press release? And when do you expect the JV to approve it?

14:43 Yeah. Thanks for that question. Yeah. The two well program, it's it's pretty firm at this stage. Does, as I said in the press release, require formal approval by the JV, and that's gonna happen, you know, in the next couple of weeks. But we, you know, we, as a JV, we've met, we've discussed, we've gone through it in detail, and, you know, we we basically have agreed it in principle. You know, we hope to get spudding the first of the two wells, certainly, in in q three, and then follow that up by moving the rig back up to the Mungi area to drill the second well this year. So, yeah, it's a it's a pretty firm program. Thanks, Philip. And perhaps just staying on the two well program, how long more is FALCON carried for? And will you be carried through all of the two well program? Yeah. It's one of the best carries ever, isn't it? And I keep saying it because it's one that just keeps giving.

15:31 You know, it's it's we've been carried since on with with this project since 2014 with in terms of an origin stroke, Sasol stroke, Tamron stroke, everything. You know, prior to that, we were carried by Hess. But, yeah, we've been carried forever. And this the carry still goes on. You know, at some point, it's gonna run out, but not today. And, also, I think it's worth noting that part of our negotiations with Timber last year, if you remember, we got another top up of a gross carry of $30,000,000 as part of a set of a negotiated position in walking away from our certain preemption rights on the deal they did to acquire the assets from Origin. So but as I said, at some point, maybe before the end of this next well and the start of the second well, the the current carry will run out, but that will still leave us with a balance of that 30,000,000 I repurchased because about 16 and 16,600,000 of that, that only kicks in, in, when is it, July next year.

16:31 So so it's still a long way to go. Perfect. Thank you, Philip. Just turning on to the next question that we have here. Does Tamboran have enough money to complete the proposed 2023 drilling program? Well, that's the question, I guess, you're gonna have to ask Tamboran. The last time I looked, they had yeah, about 29,000,000 Aussies, so about 20,000,000 US dollars at the end of March. But like I said, that's a question you gotta put to them. You know, this two well program, and we're still carried. Like, they probably need more money than that, but they I'm sure they've got plans

17:10 in terms of how they're gonna do that and and get on and travel. So, I mean, the the fact we're moving forward on a on a on an approving work program with them on a two l program, you know, we're we're pretty confident that it's up to be there with us as our partner and having the funds to do so. That's great. Thank you very much for that. Why are you moving away from Amunji area to Shenandoah? If you say that there is no reservoir quality issue, then why take the risk of moving to a deeper location? So how many do wanna Yeah. I'll take that one. Yeah. The the Shenandoah is about as Philip said, it's about 60 kilometers south of the Amunji, but it's also in in a a deeper area as well. It's gonna be about 800 meters deeper, so we'd have a little bit higher absolute pressure.

18:01 And based on what Tambrin's learned from their, wells that are to the east, the Tanambarini wells that are operated by Santos, they believe that the and we believe that the production potential could be a little higher than the Yamanji area based given that depth. But, you know, we're absolutely wanna go back to the Yamanji area. We haven't condemned it in any form or fashion. Thanks, Tom. And Philip, perhaps two final pre submitted questions perhaps for you here. Are the two proposed wells horizontal? Absolutely. Yeah. Yeah. No. We won't be drilling vertical. We might have to do a pilot vertical at the Shenandoah location. In fact, we probably will. But, no, these are two, you know, at least a thousand meters. We might do a little bit more, but, yeah, we're looking at two one thousand meters to go in and track those and get that kind of 3,000 meter sorry, 3,000 MCF a day commercial flow rate. So, yeah, two horizontal wells, a thousand meters each.

18:59 Perfect. Thank you very much. And the final pre submitted question that we have here asks, Tamboran mentioned a H and P rig recently. What is the status of this rig? Yeah. The H and P rig is a U. S. Rig. It's a pretty big rig. Tom probably know a bit more of the technical data of this rig, but it is a big powerful rig. It'll be able to drill longer, deeper wells in the basin than than the previous rigs we've used. That rig was brought into country in Darwin, I think, around about April. So it's in country. It's ready to go, and it will be the rig the JV is gonna use to drill this two well program in 2023. So

19:37 Perfect. Philip, Tom, thank you very much for that. And that actually concludes the pre submitted questions. And ladies and gentlemen on the call, if I could please ask you to now submit your questions and to put forward to the team. And, Philip, Tom, perhaps if there are any topics in the q and a tab on the right hand side that we haven't covered or perhaps you'd like to add a bit more color to, if I could please hand back to you just to read out those questions and give responses where it's appropriate to do so, and I'll pick up from you at the end. Thank you. Thanks, Jake. Tom, you can see your questions, I presume. So do you wanna take the first one? Yeah. I'll head back up there. I was scrolling down. Sorry about that. Getting ahead of yourself. Well, there the question is, won't there be completion issues elsewhere in the prospect?

20:23 Are these completion issues specific to this block? We don't think the the completion issues are specific to this block. We think it was an issue with completion fluid. And and so, once we I once we confirm the the root causes via the lab and get some recommended solutions, to to go forward, we we think we can, alleviate those those issues. It's not a guarantee, as I said before, but it's, we'll we're gonna be constantly learning. But, yeah, I I think we'll, we won't have to they they're not specific to this block. Sorry. So maybe, Tom, the next two questions, you can take them together if you wouldn't mind.

21:12 So I just give just give it time to read them maybe. Just So the one question is, what are the flow rates did we expect? You say, you know, what went wrong? Can this well be cleaned up and deliver higher rates, or do you have to move to another well? And then the second question, is there any thought that the Imungi 2 can be cleaned up and eventually produce 3,000,000 cubic feet a day?

21:39 It's it's certainly possible. The that but the JV is gonna have to evaluate whether we spend the money, the time, and the effort right now to try to clean up that well. It's greenhouse we're not selling gas out there right now. If we were if we were in a position where we were selling be able to turn these wells to production, you would certainly go out and do that work right away. But, this gives us time to to think about it, come up with the best course of action, and then and decide if we need to spend that money right now. So the next question, what are the capital commitments for the next two wells for FALCON, and where will that leave the net cash position? So, you know, you look at these wells, it costs 30 odd million Aussie dollars, to to drill, and complete and frac.

22:28 We're at 22 and a half percent. So you got two wells, maybe 30 including a bit of it might be up to 40,000,000 Aussie dollars for these initial wells. The fortunate thing is our commitment is anywhere between 22 and a half percent and zero. And and that's because of this late you know, this the more recently negotiated position we executed last October. So we can tailor and our plan is to go in at '22 and a half percent. Okay?

22:54 And if we do go in at 22 and a half percent, well, we still get carried for a large portion of the first well. We will not be carried for the second well because it's falling into, the end of twenty twenty three. There is, as I said earlier, further carry in that starts in July, but the next well drill ups anywhere after the July 1 next year. You know, about half of that cost will will be carried from that. So, you know, our commitment is flexible. We have 16,000,000 cash in the balance sheet, so we're not running out of money anytime soon. And we've got more than enough to pay our share to drill these two wells this year and see ourselves at the end of this year between cash and carry. And then net position, I'm not quite sure. It's a bit early stage because we're still working through the numbers with Tamron, and that's why we haven't signed off this two well program. We're still going through and fine tuning those numbers. So I don't you know, I mean, we won't have $16,000,000 left in the bank at the end of the year, but, you know, we'll still be in a, you know, in a good strong, you know, position. And then hopefully, that stage have, you know, positive flow rates.

23:58 Next question from Gary. When will we see the stock shares start to rise higher? Well, I'm sorry, Gary. That should have been today, and it's not. So and I you know, I know the pain of shareholders, and many of you have been shareholders for many, many years, and it is, you know, another another setback. So when you see it rise, you're not gonna see it rise substantially beyond where it was yesterday. And then, you know, a rise back to yesterday's level has not a rise. You're not gonna see a rise beyond yesterday's level until you see commercial flow rates. And, you know, with the program we're putting in place, we'd expect to see commercial flow rates by the end of this year. So that should translate into a higher share price. Next one, has FALCON financial commitments to to do well has been estimated? I think I've kind of answered that as best I can, and it's as I said, it's variable.

24:51 Thanks for all the work. Why did we announce these results and not Tambern? Interesting question. You know, we have we we're regulated by the AIM in London and the TSXV in Canada. Tamber are regulated by the ASX in Australia. And we even know between Canada I don't know the Australian regulatory rules in terms of timing and release and time to release of information. But I certainly know what it looks like in in in AIM, and and Flynn knows very well how it looks like in both AIM and in in Toronto. And we work by the guidelines that's given to us in the device we receive, particularly from our nomad in London and our lawyer in Calgary. So we had information. We had we were waiting for the lab results that we only kinda got back Tuesday, so Wednesday this week, so we could come back and tell you a fuller story. We did kinda come out and tell you a half a story, and we had that more or less full story even though there's more lab work still to go on. And we may not we may get more lab results next week, and perhaps Tamron took a slightly different view that they want to have the next bit of the story from the lab next week before they go out. But I can't really speak for them as to why they that's the only thing I can hint at that that's probably why they didn't put out anything today.

26:12 I'll take this question here. You have failed as CEO to deliver one commercial well or increase any shareholder value since the moratorium. What do you say to all those who've supported you for years via their hard earned cash, which continues to erode under your leadership? Fair question in one way, but you've got to understand we're a nonoperator. So much of what happens is outside the control of FALCON. What FALCON has delivered time and time again is negotiating good deals, certainly, since I've been involved in in in 2013 and getting rid of Hess, 2014 bringing in Origin, 2020 getting a top up of about a 100 plus million of carry from Origin, '22 getting Sheffield on board for 20,000,000, '20 end of twenty two getting this negotiated settlement out of Tamron Stroke Daily Water, an extra $30,000,000.

27:08 There are things I can control. I can't control geology. I can't control the operation. Fail as a CEO, you you that's your view, but I can only do what I'm that's in my control to do. So but but thank you for your question. So Tom, I think you've answered the next one. The probability two h damage can be corrected. I think that's been answered. I think the same with the next one. Next one, the same. How much sorry. This one, how much blame do you give to yourself and the second rate frack company you used? Gosh. I didn't know we used a second rate frack company. I know it wasn't the the the household name of Schlumberger that everybody knows.

27:55 And, again, blaming myself as unfortunately, I can't control operations. I'm not in the driving seat of the bus. I'm I'm in the back row seat. Who are passengers on this bus? And as for the frack company, no. I mean, the completion operation wasn't a frack company issue. It was, you know, the completion itself, but the frack company issue wasn't a part of that problem. Next one, what is the plan if Tamron can't raise new cash? I don't like these what if questions because they're kind of like, you we could forever try and find what would happen here and there. You know, I I got a pass on that. I'm just assuming they're gonna confidently, and I hope they do raise some money as to what happens if they don't. Well, we'll deal with that.

28:44 Mentioning I mentioned I was excited about the Ford program. What specifically gives them confidence in that program that we won't see a repeat of the current results? Well, the confidence I have is the same confidence I had six months ago. You know, this the geology here, you know and Tom has looked at it long enough, and I'm not a geologist, but the geology here is great. The reservoir is great. The quality of it has never been in question. Have a two well program. That's why I'm excited. And, you know, will we receive a repeat of the current results? No. I think we've learned a lot. Tamron has learned a lot. Daily Waters, our other partner that worked closely with Tamron, have learned a lot, and, hopefully, they'll be more involved in how wells are completed going forward. So, no, I'm I'm confident, excited. I'm certainly both from the geology and the reservoir. I'm also excited about the program. I'm confident we won't repeat these mistakes and completion errors again.

29:35 Yeah. If I may add too, Philip. Yeah. We you know, this the two h well along with the one h produce proves that we have a a working hydrocarbon system here that can deliver gas. And the challenges going forward is to how do you deliver economic or commercial rates of gas. And and we still we still have that optimism and confidence, I guess, that we'll be able to do that. Now next question. How although we have been carried forever, thank you. As you say, we have yet to see any commercial wells. True. How can we raise money with a stock price so low? Good news is we don't need to. We don't need to do it today. We don't need to do it tomorrow. And given the flexibility where we can move our our percent from 22 and a half percent down to zero or a 10 or five or 15 to meet our capital position or whatever, you know, we can always tailor that up and down depending on what the market's appetite is reporting more money. We don't need to be raising money with the stock price so low. You know, our our next time we'll be raising money will be 2024, and we'll have the results of two wells.

30:41 And if these wells come in, we won't have a low stock share price. If the wells don't come in, wow. We've got a different problem, which we don't anticipate because as I said in my previous answer, we're very, you know, excited and confident of of the next two well program. What are expectations? How Tamber will come up with their level of funding? Look. I'm I'm not gonna get in much more about Tamberin and and what happens if they don't because these are all kind of hypothetical questions. Next one, why weren't we informed earlier about the problems we have with this well? Well, today is the earliest we could have informed you. So we work very closely with our advisers on timing and and making sure that the market is is up to date in a timely manner. And when we had the the poor results, we needed to understand what that meant, and we needed to go ahead and tell the market the full story.

31:34 So and that full story only we only got, like, Wednesday night. So by the time we prepare sorry. When Tuesday night. I think it was actually 2AM, if I'm not mistaken, by the time I finished at on the June 21. So and then we just put a press release together and get it out as soon as possible. So it could not have been done any sooner. Any significant overrun on the anticipated well cost? No. I mean, the well costs are high, but, I mean, they're they're done pretty much on on budget. No real overruns. So, you know, the the additional cost now might be in terms of do we go after a cleanup costs and, what would that actually mean. Oh, somebody moving on to any prospects for South Africa. 2001 oh, wait. '10, we launched our application.

32:22 So maybe next year. Or as Rory Rory McAuliffe says, I'm I'm I feel like I'm getting closer. But look at it. It goes on and on. I mean, the good news actually is very recently, the South African geological survey conducted their own drilling, not a not a full exploration well, but a borehole, but at depth down to about three and a half thousand meters. And they've got themselves excited about the potential of the crew, which is great. I you know, I'm talking to people I talk to in in South Africa. There are still, you know, significant, moves towards getting this famous bill through parliament. The bill has been drafted. It's ready to go. And once that bill is approved by parliament, you know, they're back then in in in awarding that contract. But I've been saying it for, gosh, eleven years next year, and some year might just be. I mean, the prospect the prospectivity of the crew is fantastic.

33:21 And should we get awarded a license, we'll grab it, and then we'll bring in, you know, a a good partner. I mean, there's two or three very obvious choices that we'd love to bring in. So Tom, maybe you might take the next. Thank you. Yep. Based on US early exploration early stage exploration experiences examples, are there similar experiences to this well with the completion issues where there was ultimately success in the well and the basin as a whole? Pardon me. Yes. Of course, the the the one that comes to mind, and I and I worked the the Barnett Shale for for quite a while both with Burlington Resources and then with Chesapeake Energy. The Barnett, George Mitchell and Mitchell Exploration for years tried to crack the code on the Barnett Shale.

34:13 They had drilled the Barnett, and we always had gas shows in the Barnett. We knew it was a good source rock, and Mitchell end up proving with slickwater fracs that that, it could be commercial. Now at at Burlington and at Chesapeake, we we started out drilling, I'll put them in 3,000, foot or a thousand meter wells. And our first wells we completed as horizontals, we would do 300 meter stages. Well, that over time and those were okay wells, but over time, the completion strategy evolved. And we drilled longer laterals, and we ended up drilling or completing much shorter stages and putting more sand in. So so, absolutely, the the Barnett has has been a success in the sweet spots of of the Barnett, and and nobody no basin that I can think of drilled their best well first.

35:22 So thank you. Sorry. This oh, sorry. Next one. Could you address how the recently announced LNG facility for Tamarind will impact the pace of progress to commerciality? Look at I mean, how do you get to commerciality? You drill commercial flowing wells. There's no doubt, though, Tambern have a plan, and it's a plan to get to commerciality and get to commercial production as quickly as possible. The LNG is a bigger part of that, but that's a kind of 2030 plan. There'll be a lot of work to do before now in 2030. So I think it's nice and good and all the rest that they're out there, you know, doing a land grab in the middle arm in terms of an you know, land to build an LNG facility, but it's not gonna change the pace. They're gonna they're gonna go after this as hard and as fast as absolutely possible.

36:13 And that's their that's actually one of their key focuses is turning this into commercial production and not just drilling wells for well's sake. So that, you know, the LNG is just part of their overall bigger plan to get into production. So chances of Brian Sheffield making a bid for FALCON. 15% of the company. He's got, I can't remember, percent maybe 15 or more more percent of Tambourine. He owns a bit of Empire. He owns 38.75% of the acres. He's got overriding royalties. He's invested a 100,000,000 US dollars cash of his own money in the BLO. Making a bid for FALCON doesn't doesn't make any sense. You know? I mean, I can't speak on behalf of what his plans might be, but chances?

36:58 No. I think pretty low. Gosh. The next one one is even is it possible Sheffield advised the incorrect techniques of fracking to Tambern? Knowing the results would hammer stock price to put pressure on Tambern and FALCON. Oh gosh. No. So look. One, Cameron are the operator. Brian certainly wasn't advising him. That's the first thing. Two, Tom, you know Brian a lot longer than I do. That's certainly how he does business. He's a fantastic businessman, but no, he certainly wouldn't do business that way. So is it possible? No. Absolutely not possible. Not at all at all. Well, not even remotely possible. No. Agreed. Would you agree to suspend further issuance of stock options and share dilution until share prices recover to some kind of return for shareholder?

37:50 I've been an investor since 2009, and share price today is about half. Sorry. Let just get to the end of the question. I'm based at that time. Yeah. No. But we're not out to issue shares at this level. So would I agree to suspend further issues of stock? Yes. Absolutely. You'll note a resolution was passed today for the annual approval of the stock option plan. Please note that is not an approval to grant stock options. That's just an annual approval of the stock option plan that is required. We will not be issuing stock options at these levels. We will not be issuing stock options until we have success. So, yes, I can agree to suspend. Absolutely. Tom, you're a director of the board. I think you might agree with that. Yep. Absolutely. Thank you for making sure that there has not been a false market in Falcon Shared beyond today, and we fully complied with AM and TSX.

38:40 Relationship with Brian Chef will remain good, and do we have similar views on what has caused and does and do we have similar views on what has caused us issues here? So, look, our relationship with Brian is fantastic. Tom, you've known him for, don't know, how many years? Almost ten. Ten years. I've only known him for, gosh, two years or less. Our relationship is great. We have a very transparent relation, not just with Tom, but his entire team at Daily Waters. And we've got a huge amount of mutual respect. You know, a lot of that, you know, comes from Thomas' tenure relationship, but we're very transparent with Brian. So, yeah, our relationship with him is is is very good. In terms of does our sorry. Are we do we have similar views on what the issues here are? Absolutely. And I think it's it's fair to say too that the lab results that are are ongoing are being run by Daily Waters because of the proximity of the lab to Brian's team in Austin, Texas rather than being run by Tambern.

39:39 So yeah. So when you know, they're seeing those and they're talking to Tom because, obviously, Tom lives in Austin as well. So yeah. So they absolutely agree with the views that we have, gleaned from the lab analysis. I don't know, Tom, you want to add anything else to that answer. It was a it's a lab that that partially energy had used prior to and that so yeah. And then the last question is is the Hungarian property ever going to be drilled? We're never gonna drill it. We did that back in, whatever, two thousand five, six, seven, eight. So, no, we're not. It's still there on care and maintenance. Somebody, every now and again, has a look at it, particularly, you know, where the gas prices might spike. And but, no, we'll never do it. So I think that's it, Jake. So back to you. Philip, Tom, absolutely. And thank you very much indeed for being so generous of your time then addressing all of those questions that came in from investors this afternoon. And of course, if there are any further questions that do come through, we'll make these available to you immediately after the presentation has ended just for you to review and to then add any additional responses, of course, where it's appropriate to do so. And we'll publish all those responses out on the Investor Meet company platform.

40:51 But Philip, perhaps before redirecting those on the call to provide you with their feedback, which I know is particularly important to yourself and the company, if I could please just ask you for a few closing comments to wrap up with, that'd be great. Yes. Thanks, Jake. And and, again, thank you, Tom, for for coming on and helping with some of those questions. And, again, to our shareholders, look at guys, I wish it was much better news. And, you know, you've been incredibly patient shareholders. I I've got to know a lot of you personally over the last several years. And, you know, this news isn't what we expected. It's not what you wanna be reading this morning. And it is, you know, a a setback. That's all it is, a setback. We've had multiple setbacks. Is this the last setback? I hope in the short, medium term, absolutely.

41:39 And, you know, we were we're as ever as confident. You know, Tom and I and everyone else involved, Brian Sheffield and his team, Tamron and their team, we're as confident as we have ever been on on the chances of success of real commercial success in the beetle loop. And we have a a program going forward, so we are gonna be drilling and getting back out and hopefully delivering positive results by the end of the year. But it is another set of setback, and it's a, you know, another six months that you're gonna have to wait and see, will this really come good? But, again, thank you all for for searching for attending today, and thank you all for for your massive patience as FALCON shareholders. Philip, Tom, thank you very much indeed for updating investors this afternoon. Could I please ask investors not to close this session as you'll now be automatically redirected for the opportunity to provide your feedback in order the management team can better understand your views and expectations.

42:30 This will take a few moments to complete, but I'm sure will be greatly valued by the company. On behalf of the management team of FALCON OIL and GAS LTD, we would like to thank you for attending today's presentation. That now concludes today's session. So good afternoon to you all. Thank you. Good afternoon. Thank you all.