article for your general information..., page-18

Yes, in fact they would have done this twice now. They have an indicative idea of composition from the returned cuttings etc. However, you've got to log the sections to start making calls or announcing it to the market. Basically, the accuracy isn't good enough. Use of logging-while-drilling (LWD) tools over recent years has replaced the need to run multiple wireline tests. These days you can achieve data from LWD like neutron porosity, which will return a hydrogen index (HI) or number of hydrogen atoms in a given 'space'. The point is, you've got to drill to know for sure regardless of the results in the returned material.

The situation has become a bit more complex now that the upper zones are good. If this was not the case you might take on the risk that the 'pay' was in the lower formations. In NEN's situation, there might be HCs that could add to the reserve base in these sections even if the composition is high in C02. This is because each sand will contribute to a total. i.e average C02, average flow rate, total resource/reserve. While the lower zones are larger, they are somewhat irrelevant, because if they do not flow economically it doesn't matter what the composition might be. Costs to retrieve the resource, versus price that it is sold becomes a key consideration.

All the detail that I have wanted to post rolls up to a seemingly unrecognised fact. After logging what they could from zones 1, 2, and 3, NEN are pushing the JV to conduct a production test from these sections. This is because regardless of what is below it, it is commercial. They must know it is bigger and of a quality that exceeds pre-drill estimates so as to warrant a test. They will want this, so they can start financing discussions and therefore produce from it.

We have to be cognisant of what Ken said pre-drill: "a decision whether to production test will be made after reaching total depth". What happened? Well, we didn't even need to get this far before making the judgement call. If you think I am extrapolating hearsay nonsense, or embellishing the situation I challenge anyone to call up NEN and ask them why they made the call after only testing zones 1-3. Maybe not everyone do this, just a few ;)