Ann: Operational Advisory , page-35

Hi chand, just be careful about the conclusion you draw from the logic you've used. Remember:

1. they didnt do a flow test to determine a sustained flow rate, the conducted a swab test to extrapolate a flow rate.

2. They would have performed a swab test rather than a flow rate test because the formation pressure is low.

So the max swab test flow rate they got would have been from one of the target intervals tested, and being the max, the others would have been less - we dont know how much less, but while the relative flow rates may not just be proportional to the target interval thickness, because interval properties could be different.

In principle lets say the flow rate from each of the 3 target intervals was 48 bopd (31' interval) > X bopd (22' interval) >> Y bopd (7' interval - safe assumption?) then cumulatively the comingled output could be around 100 bopd unfracked, and maybe as much as 200 bopd fracked (optimistically?).

So that sounds good, but we dont know how long the formation pressure can sustain that output, particularly if the pressure is low, and dont forget there will be a decline curve anyway, if the formation pressure is low, the decline curve may be steep.

If there is a long tail to the decline curve which ends up giving a EUR of 200,000 bbls of oil, thats certainly one thing we're lookng for. But the other thing that is just as critical is the early production needs to be high enough to obtain a reasonable payback period (< 2 years?), otherwise the company wont have the money in 2 years time to drill some of the other 250 conventional wells.

IP rates arent the be-all and end-all, the decline over the 1st 3-12 months will be far more critical, and what we have so far isnt even a full-fledged flow test, but a swab test result.

Cheers, Sharks.

PS: oh and sandys, you noticed the frac started on time? :-)