gas at intial level of primary target interval, page-4

Not too sure if this has already been mentioned but worth highlighting that drilling cost estimates have increased by 50% since 19/12 announcement...

Announcement 19/12/09 - "Total dry hole cost to drill the initial well is approximately US$1 million".

Announcement 04/01/10 - "Total dry hole cost to drill the initial well is approximately US$1.5 million".

Not a big deal if this project achieves commerciality against long-term profit and provided this increment doesnt apply to future wells. However this blow out could be material on short term cash flow. If these costs continue to increase expect another capital raising much sooner than anticipated IMHO.

Nevertheless, like others have mentioned, I too feel that the net pay estimates could be much higher than originally estimated especially given the gas show from as early as 7,000ft. Could TD possibly revised to below 9,000ft???

And then today...

"The well has recorded its second significant gas show at around 8,010 ft. The well circulated high levels of gas cut mud and the mud weight has been increased on several occasions after 4,000 to 6,000 unit gas shows were recorded in what appears to be the initial sections of the primary target interval."

Very much looking forward to the electric logging results and subsequent flow testing with revised net pay estimates!!!

And although its there in black and white its also worth reminded holders of the 29/12/09 announcement title...

"CONFIRMATION OF OIL & GAS AT FAUSSE POINT"

Also the price action was very bullish today. The SP remained close to it's high for most of the day with the highest volume ever traded and VWAP at 0.393c which was well above yesterday's close.

Looking forward to seeing what the rest of the week brings.

:)