confidence we will strike oil?, page-3

http://www.sunres.com.au/pdf/broker/SUR_External_20110117.pdf

Multiple Wells Onshore and On Trend De-Risk Program
Conventional exploration is typically a very high risk undertaking, especially
when significant leverage is possible. Sun has similar upside potential to
several other listed ASX oil and gas juniors (possibly 16 times the current
share price); however, we consider that its acreage is not as risky as some
of the frontier areas that others are targeting. Most of these companies trade
at a significantly higher market capitalisation to Sun, which makes SUR an
attractive investment proposition at current prices on a risk / reward basis.
SUR has a multiple well drilling campaign in a location nearby and on trend
to the largest onshore field in Thailand. An historic well on the block, drilled
by Shell, encountered oil shows, indicating the presence of an active
petroleum system. The well was not tested due to perceived lack of
reservoir and a low oil price environment. Recent seismic has indicated that
this well was drilled off structure and that more prospective locations exist.
Given the current high oil price and the low capex per well (~US$2.5m
each), even a small oil accumulation would be commercial. Any discovery
would high grade the potential of up to 23 identified prospects and leads.
The first well is located directly above the interpreted source kitchen and, in
our view, is likely to have oil shows. Risk around reservoir quality and seal
remains; however, given the multiple well campaign (and multiple play types
and target horizons), the chances of finding all the required parameters for
commercial oil in at least one well is considered to be relatively good (i.e risk
is low-moderate rather than high).