Ann: West Erregulla Update, page-36

It's not that there's a water "issue" - just that when you drill down-dip of a gas-bearing well there is always the chance you will hit the gas-water contact. If you drill down-dip and still don't encounter the gas-water contact that has positive implications for volume as it implies a larger column height, which in turn implies a larger gross rock volume.

Depending on the shape of the reservoir, it could be significantly more than a linear relationship too - so doubling the column height could be a 2x to 4x increase in rock volume and thus GIP, in a normal conventional gas reservoir.

It's a bit trickier in this reservoir to quantify because of the nature of it - streaks of permeable rock in a mass of very tight rock of average 6% porosity. It's not a simple conventional trap at Wagina level and things like stratigraphic trapping probably come into effect. There may not even be a traditional gas-water contact here, it could be permeable sand lenses embedded in a mass of gas-charged tight sands. But not finding a GWC at WE4 is a good thing any way you look at it.

I'm glad they are not targeting this as the primary play as it would be pretty risky, but since they have to drill through it to get to the primary target KHC, it's a handy bonus to have. If the MDTs show any sort of permeability it will be icing on the KHC cake.