fracturing, page-75

Hi laughingnumbat:

"Reasonable Case NPV 10% = $2.2 billion (gas in place has not been proved - as reserves and (this is an SPE definition) there is a large downside to the resource estimate, most releases have focussed on the upside and a large amount of work to achieve this)"

Isn't it a little pointless going onto a forum for a speculative gas play and saying the resource has not been proven? I would have thought that with 3 holes drilled in an area where you can drill 400 holes, it was a given that the exact resource size was not proven. Current estimates put the recoverable resources at 2-3.5 Tcf.

3D sesismic is also net yet complete. When it is combined with more information from the flow tests - then we will be closer to proven reserves. However by that time the project will be derisked (assuming successful flow test), and the brokers will be pushing TSV onto their non-sophisticated investor base.



"Production from fractured reservoirs drop off very quickly, which means that to keep up with a contact for supply you have to keep drilling or stimulating.. check to see how many wells are on the Jonah field"

Correct. Which is why the NPV estimates provided in the ASX report include costs for around 350 wells to be drilled. However, to get the project going will take around 20 wells.

"Facilities to tie in 50-100million"

Page 8 of the Latent Petroleum section outlines the project costs:

http://www.asx.com.au/asxpdf/20080317/pdf/3182xk2wc7gf0n.pdf

Maybe you could read the report just for entertainment. It's all pretty clearly laid out and may help improve your fun guesstimates.


Joel