where are we at?, page-3

OBL is currently all about the Derby block. It does have other things on the boil but for now It's Derby that is the most solid prospect for the company (and what FMG is here for).

Basically BRU has the surrounding permits and has proven a very large basin centred gas accumulation on a scale to possibly rival the North West Shelf. It's tight gas with small conventional horizons but it's very wet, about 25mmbbl to a tcf. The prospective part of this formation lies underneath much of Derby and most any where they've drilled it's come up good. BRU recently bought out half of Derby because they know what's very, very likely to be underneath. It's not risky conventional drilling, it's more like shale drilling where the formation is prospective success is likely.
The main risk though is commerciality, can they get the tight gas out of the ground economically.. With semi-conventional sections and very high liquids ratio it's a good bet they have a North West Shelf sitting underneath waiting to be tapped.
It will take a while for the infrastructure to be developed to actually get it to market but most of the profit for shareholders is at this end of the spectrum, the exploration side. FMG are actually quite clever locking this in for not a particularly large amount of money. Some very big players in this block now and it's great to finally see the basin being taken so seriously.

There are a few other players in the basin and a few other prospective formations in our permits, but this is the only "proven" unconventional prospect in the basin with flows so far. Although KEY and BRU will be doing some work on the Goldwyer very, very soon and NSE is a third of the way through their program with dry gas indications so far.