Ann: Daydream-2 Operations Update, page-58

My feelings (not advice):

Good is that the flow rate has increased, so the frac has acheived something, and without any technical difficulties.

Less good is that the rates aren't spectacular. The statement that "on multiple occasions stabilized rates were observed between 2.1 and 2.5 MMSCPFD throughout the flow period" suggests that the flow rates weren't actually stabilised (this sort of vague language seems to be pretty typical of EXR).

The decrease in rate between the first and second flows might also be considerd a negative. One big issue is that there still isn't really any evidence that the Lorelle is a decent size of reservoir, so the economic modelling has to be very uncertain due to the lack of decline info. Counter-intuitively, an initial rate of 2.5mmscf/day from all the zones might work, but from one zone it might not (since the overall reservoir volume would be less, so you would probably see more decline).

EXR clearly feel the well performance was inhibited by the wellbore loading with liquid, and that using a narrower tubing (to increase gas velocity, and ability to lift fluids) will help. This makes sense, but again the 3 mmsccf/d is "calculated" so of little real value.

In my opinion, the key prize is still the tight play (because there is known to be a lot of gas in it).

Overall, my feeling is that this is a decent result, but the big players probably won't be that interested so I doubt there will be a significant share price rise. There might be a little blip caused by excited retail investors and some traders, but overall I can't see much increase until the later tests. Hope to be proved wrong though!