Ann: Cooper Basin NTNG and SACB JV Unconventional, page-12

re: Ann: Cooper Basin NTNG and SACB JV Unconv... Let's not forget that the timescale of each participant are very different.

Chevron, as one of the biggest companies in the world, can take a very long-term view. If the wells can't flow economically now - due to price or technical problems - they have the capacity to wait until prices go up or technical solutions come down in price. This is but a tiny piece in their global jigsaw.

For Beach, they probably need to make this commercial (or know it can be made commercial) in 2-4 years. Shareholders will not tolerate constantly funding the shale program out of cashflow from profitable parts of the business forever. You think Beach would want a yes/no decision after the program with Chevron is complete.

Icon, as the minnow, need an answer in the next year, simply because they have such shallow pockets.

I always thought Icon would be squeezed by Beach but given the difficulties/costs/delays, I can now see a scenario in which Beach and Icon sell out to Chevron (with Beach keeping a small %), and Chevron putting the asset in the bottom draw and slowly proving it up themselves in response to international/domestic gas price movements and technical breakthroughs.

Just speculation. But this latest announcement just goes to illustrate how you need very deep pockets to absorb/manage the risks of proving up shale 4kms down.