>For a fun game of what if Philip (got his first name right this time) O'Quigley is successful at selling the Beetaloo assets at or above the red line as per his comments to me on Monday!!

Okay. Let’s examine the following statement:

“This would put the Beetaloo's value very close to 5.6 billion dollars (7 million acres multiplied by $800 per acre = $5,600,000,000) At this point in the future - where Hess has proven up the field - Hess will own 62.5% of the Beetaloo going forward. This would put the value of the remaining 37.5% owned by Falcon Australia at approximately $2.1 billion - which would potentially put the share price on Falcon up 10 times from here, plus we would still have the Karoo and Makó Trough going forward.”

I would like to point out a few misconceptions in there. First and foremost Hess doesn’t own any acreage in the Beetaloo basin. What they have is 62.5% working interest. What that means? It means that they have to produce oil or gas from the ground in order to benefit from this partnership. Or, they can buy the property from Falcon Australia.

Right now, we are just below the red line. As you said $800 per acre puts the value of the Beetaloo at 5.6 billion dollars. So, if Hess wants to own the Beetaloo outright, it would cost them $5.6 billion. Falcon’s ownership in Falcon Australia is 73%, or $4.088 billion, and that translates to $5 value for each Falcon share.

Now, I don’t think that Falcon will be selling at this stage of the game, because on the other side of the red line, the value is $4000 per acre or 24 billion dollars. Unless Hess doubles the ante, say $10 billion even.