getting closer to the business end of eg2, page-32

Excellent subject! The best discussion I've seen so far on AJQ here.

There is a lot of gas around but it's all about getting it to flow to surface at an economic rate. Economic means extraction costs plus to market costs v's gas price in a simplistic sense. So we have a few variables always moving around that effect the economic viability here.

Where one case might need 5mmcf/d plus rates another case may need only 1mmcf/d to actually achieve the same level of economic viability. One thing that is indisputable in Armours case is with regard to the size of the potential reserve. To make frontier exploration work you need a long life reserve to make viable the infrastructure spend on getting it to mkt. Short life high flow rates are pointless unless you have existing infrastructure or a big end user near by. So comparing onshore Texas to ATP 1087 is pointless in my opinion. What's important is the mandate of the end user or farm in partner which ties into energy security.

In summary I believe a major at Gladstone would rather have their thumb on a massive reserve with moderate flow rates than a moderate size reserve with high flow rates. If its big enough and 40tcf is certainly big enough, well pipe really becomes a non issue.

Good luck all.