anns: conoco executes the farm-in agreement !, page-34

Petunia, I can only guess that for whatever reason he doesn't understand he is downramping BRU. On one hand I want to think he's not really what you might call a sophisticated micro/small cap oil investor who BESBSs, trades in and out during drilling, works the initial discoveries for large components of the profit, or maintenance of capital across multiple drills etc.
For example Yulleroo-2 flowed at an extrapolated rate of 3-4mmcf/day, Y3 and Y4 are scheduled as the field moves into the appraisal and commercialization phase. It's considered a contingent resource in the sense that Y3 and Y4 will specify the parameters. To pretend it's "finding nothing" is basically saying it's nothing until it is a proven resource, which in investment terms means acting more like a bank or a retail investor (or a fall in love and hold on for dear life investor) rather than every step of the way being another risked variable to trade, with diminishing returns the further along you go. He talks about seeing other pictures in other junior explorers as though he's been burnt digging in for the long haul rather than gradually taking profits (and hint if you read the anns you'd see there was more than just a flare, there was a sustained flow from stimulated pinpoints). It's not "nothing", it's a risked percent of the mean recoverables and those little flare pictures are trading cues for investors.

At the same time it's hard not to think of it as downrammping (how I originally took it) given on one hand he's calling an extrapolated 3-4mmcf flow rate from tight and conventional reservoirs "nothing" but the shale gas we're here for at NSE has worse profitability characteristics and risks. We can all agree Yulleroo is a small field compared to the potential of the Goldwyer but it has regional significance.. Ignoring it means ignoring the GNP. It means ignoring the potential of Lawford. If he had called it "nothing" because it's "only" considered a ~300bcf field I wouldn't have objected vociferously. (although once again they're talking about mean 13.4mmbbl liquids which is likely to not be that much less than Ungani!)

Also he calls NSE's targets bigger than BRU's. It really depends on how the Goldwyer turns out. Depending on the map BRU has a larger share of the wet gas window than you probably think and most all of the oil window. I'm not at all suggesting this is the case in the slightest, but if the oil window sections are the same as the independent report (which basically calls all of NSE's tenements wet or dry gas bar a fraction in the north, east and west extremities) and they turn out to be oil productive like Eaglesford then NSE could have a fight on it's hands in terms of profitability in that it will be gas heavy with half the share and BRU will be oil heavy with twice the share. Not to mention most of the Laurel and conventional targets. Once again, not at all suggesting that is a likely scenario, but for someone adamant on the need for a field to be "proved" before you "speak" about it, it looks a touch hypocritical!

It's kind of funny to be accused of ramping when by definition all you're trying to do is juxtapose the potential size of the omission with his statements. For example Valhalla could be worth much more than Ungani. Am I saying it is? No, but I'm not ignoring it wholesale either am I? I'm pointing to it's potential to show the enormity of what wasn't mentioned. I'd like to think I'm one of the more measured commentators around and have given rampers in my own stocks a fair amount of grief when it seems like anything not totally positive is ramping. At the same time I've never TOU'd someone no matter what they say, I believe in free speech and my statements stand for themselves and am never in the slightest concerned about pot shots taken at me, especially by those that vehemently disagree with me, because by definition they are wrong and therefore impossible to take offense from ;)

Anyways I suppose we'll see as NSE progresses, if he's consistent and calls any tight gas in Lawford "nothing" until it's got 4 drills in it, if he calls NSEs first two Goldwyer drills "nothing" until the resources are booked reserves then there is your answer. Long story short(again) as is indicated by my sentiments, buy both, be hopeful, be realistic.