Ann: Initial Murta Formation contingent oil resou, page-2

re: Ann: Initial Murta Formation contingent o... Wow, this is potentially BIG news... opening up the Cooper to the age of tight oil, which to be honest we have been pretty slow doing in Australia.

A few years ago CTP drilled Surprise-1, which flowed nothing from a vertical well drilled conventionally (ie overbalanced). They went back in with North American lateral drilling techniques, underbalanced with barefoot completion, and from a lateral of less than 400m they flowed 400 bopd.

There is absolutely no reason why they couldn't happen in the Cooper too, in fact given that the shallow Eromanga reservoirs will be much less diagenetically altered than the Amadeus reservoirs at Surprise they will probably do even better because they'll stand a better chance of intersecting high-perm streaks in laterals.

Hopefully Senex have some experienced drilling engineers from North America for whom this sort of thing is second nature. I expect we'll see some laterals going into the Murta pretty shortly, and some of these 2C barrels hopefully converted to 2P.

They might justify $5-10/bbl valuation at 2P, rather than the $20-30 that people tend to use for SXY's regular oil, but there are probably a lot more bbls of tight oil out there!