alexays Posted October 2, 2006 Report Share Posted October 2, 2006 Some highly recced posters on TMF message boards are quite excited about Falcon listed in Canada. They have found a lot of gas in Hungary, but in a hard to get to flow area: http://finance.yahoo.com/q?s=FO.V http://boards.fool.co.uk/Message.asp?mid=1...=whole#10192628 The price has fallen recently which represents a good buying opportunity. I hold some and am thinking of picking up more For instance Davjo (who I think works for a city fund firm specialising in E & P : The reality is that Falcon is on the verge of confirming multi TCF gas on the doorstep of a ready and avaricious market willing to pay. All they need to do is prove the undoubted resources are commercial. The upcoming test results should determine that. By all accounts, the porosities/permeabilities/overpressures/log results etc. indicate it'll be a slam dunk. I fail to see how the market presently interprets that differently but I'm reminded of a very respected Fool and ex investment banker for a big US outfit who told me ages ago of his long experiences in the business. It's not really that unusual to find stories apparently too good to be true. He cited CUX which he started buying in at 30 cents and spent a year lifting the drains to try and find out why it was so undervalued and gave up cos he couldn't find anything. At $4.50 he talked about buying a yacht...at $6 he bought a bigger and shinier one than anticipated. At $15, he bought a stud farm.... You get the point....;-) Yes, it could all go wrong and management prove to be a bunch of liars but I'm about as sceptical as they come and I'm in the camp that believes FO's claims are entirely credible...at this point in time anyway. The upside is about as amazing as it comes. The smell isn't 100% but I fail to see, barring Armegeddon, how anybody buying today ain't going to get an opportunity of selling at a very fancy profit in the next few months.....famous last words :~\ I think I've probably been involved with the Falcon story than anyone on TMF - started researching the story way before the March placing so I feel I know the story. I'd suggest that anyone who wants an interest should read the whole of the Scotia report - the whole thing and not just the headlines. The numbers are based on the bcga. There is nothing there for conventional gas or for any oil discoveries (not a main target but I'd be surprised if some decent pools weren't discovered given the bcga is the kitchen and fed the oil fields on the flanks). Also the recovery factors look lower than I'd expect. The report was held up while the various parties batted the data around coming to a consensus - I'm mindful of the TSE's role here and their conservatism (they could better spend their time sorting out the trading practices on the TSE IMO). So, we really should view these figures as being the ultra conservative tight gas field numbers. IMO there is a lot of upside to the numbers but who cares when these alone would justify a multi bagger? Yes, the key is the flow rates. The gas is there but will it flow? Having been in following the story, kicking tires and talking at great length to all sorts of people involved (in company, support functions, Hungarian govt officials, sceptics, other tight gas players) I'm very happy that this won't be a problem. Its so frustrating when guidelines slip but that's the nature of the beast. Falcon want the best people for the job. They know what they have and don't want to risk anything. For instance, I understand that a fracing crew was available to give an earlier start (by a matter of a week or two) but they held off till the people they wanted were available. Its also why the wells were so expensive, over designing them to ensure that they didn't have problems. That's sensible IMO. Enduring that everything comes together at the right time is a pain to organise, especially with the tightness of supplies, crews, etc. Throw in need for permits, agreements etc and some delay was inevitable - frustrating yes, but understandable. In my opinion, Falcon is, for Marc, a way of besting Ultra and what happened there. His two fingered salute as it were. He doesn't want it to go wrong and is also key to establishing he can do what he says he can, with an eye to future projects - success here would support fund raising etc at other MAB copanies. The political angle must not be overlooked as well. For Hungary this is a country changing project. That helps. My trip out there was very useful to further develop my feel for things. All the investors there - hedgies, analysts, fund managers/founder shareholders - all said the same. They all felt so concerned that they couldn't find anything wrong - just as your example with CUX demonstrates. So am I feeling a bit of pain? For sure. Am I concerned? Nah. I'd expect a full update soon and I'm quite happy to wait for events to unfold. As always do your own research, but I am fairly convinced this is worth a decent punt Link to comment Share on other sites More sharing options...
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