disappointing, page-40

Hi,

Ouch that really hurt!!

Ultimately the market decides the share price but I can see two positives in the advisory.

1. SOA II

- It is flowing naturally at upto 10 Barrels of fluid per hour with 20% oil cut ie approx 50 BOPD
- The oil is 33 degree API with 0.3 % sulphur ie Light sweet crude which attracts $8 to $10 premium per barrel over normal crude price.
- The test has been using swabbing - this means artificial lift (without Pump Jack) as water won't let it rise to surface
- With Fracking, the rate can increase upto 10 times (not saying it will happen 10 times with this well)
- After fraccing, I think it will be put on pump to lift the fluid

Overall not a bad result so far (pending the results from Fracking) and this may turn out to be the real company maker even if fracking improves the fluid production by a factor of 3 to 4.

2. AUS II

- The announcement said it produced 2526 BO and 10688 BF over 16 days ie. approx 158 BOPD and 668 BWPD - a total of 826 BFPD.
- The above equates to approx 20% oil cut

- There was no mention in release wether the water was formation water or fracking fluid. If fracking fluid then oil cut will increase over time.


So unless we get plain English advisory with full details, we won't know the complete picture.