>the fact is that Falcon did attempt to test the wells using the best technolgy that $300 million could buy, and those tests were not satisfactory.

Well I have to totally disagree with you on that one. Yes, they had the best technology when they tested the wells, all except for the stuff they really needed the most. Technology to deal with H2S! Falcon proved that the temperature and pressure could be handled, which I think was a very big deal. In fact, RPS Scotia also thought the same thing

"Falcon established the ability to drill and complete at depths of 5,600 meters"

This may not have been a big deal to investors, but it was probably a big deal to a lot of people. It certainly was for Cabot Specialty fluids. They were so excited they even put out a news release:

"Cabot Specialty Fluids' Cesium Formate Brine Sets New Record in 437 Degrees F/225 Degrees C Well Kill and Suspension Operation"

MI-Swaco was also excited about the success of their drilling fluids at those pressures and depths. There is also Caladyne, who I'm pretty sure tested their MTM Seals on Falcons wells. And don't forget MI-Swaco also invented a completely new HPHT water based drilling fluid for use in Europe, to meet the tough environmental standards.

Falcon fraced the Basal Conglomerate and started to flow gas. Unfortunately that gas contained H2S and they had to bullhead the well, and the fluids were left down there for over a month. This ruined the well. However, it has nothing to do with the temperature and pressure. Falcon proved that the techology works. New wells can be designed with proper casing to handle sour gas. Fracs can be modified to make the gas flow better. The only question that remains is one of economics, ie flow rates. That technology that Falcon proved works is very expensive!

>Had they been, we would have been in a commanding position to extract larger payments from XOM in the JV, rather than giving away the largest percentage for what is not really a lot of money (if you doubt this point, stand back and think that XOM bought a huge BCGA which at the moment stands high on the academic pile).

Given the challenges and the magnitude of this project, I think Falcon did an outstanding job of getting as far as they did in a couple of years. I also think they got a very good deal. Would it have been better if the gas was flowing at the time the deal was made? Probably, but the H2S threw a wrench into the works right at the end when Falcon was running out of money. The deal they got was comparable to what MOL got. MOL may have kept 50%, but they didn't get any cash. Falcon needed that cash.

> This lack of confidence is reflected in the low share price today.

I don't think it's a lack of confidence in the techology, it's more of a lack of investors who haven't lost money on Falcon in the past...on top of that, there's probably a lot of people watching very closely, waiting for the stock price to start moving up before they buy in. Well, if everyone is doing that, it's not going to go anywhere. Somebody needs to jump into the water first. Unfortunately, most of the biggest believers jumped in years ago and we've been holding our breath under the water ever since :)