Edision Capital Raising Report, page-2

Thanks SeanBuccs
I like that they are saying the macro perspective is favourable!
I’ve been thinking more and more about a reply GoldShares received from Tony Lawry under the “reality check” thread.
“The size of the resource will put this project on a national scale – it is arguably the largest gas project on Australian soil”
To me - this may well become a reality after flaring – if we take a look at the size of the initial coal resource from the JORC statement, then detail all the risk and reduction factors which have been applied to it through the various announcements / independent reports.
I think that given no one is ready to steak their professional reputation on the line yet, this resource has been reduced to within in an inch of its life!
This is what I can gather:
JORC Statement – 377 mt Coal
PRMS Statement – 15.2 GJ/t
377 mt * 15.2 GJ/t = 5,730 PJ
PRMS Statement then applies the following reductions (all of which are perhaps best practice at a desktop level for early stage resources, but in practice may not be as relevant to recoverable gas quantities):

• Minimum coal seam thickness of 2m;
• Maximum stone parting thickness of 1m;
• ISG resources limited to maximum overburden thickness of 200m;
• Points of observation of spacing of 4km (1km pas the last point) used in estimation of coal in place where geological correlation supported lateral continuity;
• Energy yield of coal 15.2 GJ/t
• Process recovery efficiency, which quantifies the percent of coal in place that is gasified in the ISG process as 80%;
• A geological risk factor ranging from 40-80%.

So MHA through the PRMS statement have widdled the coal resource down to 2964 PJ (51% of total).
Eddison have then applied a 20 % chance of success of the project (i.e. reduced the NPV of the project by 80%).
StateOne have also applied a 25% risk factor (i.e. reduced NPV by 75%), and have arbitrarily reduced the 2964 PJ to 2500 PJ, and applied a 16% reduction to the recoverability of gas from coal, which MHA have suggested as being 80% (43% of total – I think).
Also take a look at the operating costs that StateOne have suggested – seems quite high to me.
All in all – I think post flaring we will see the resource not only upgraded to 2P, but could actually be much larger than it has currently been given credit for.
This to me means that the statement Tony Lawry made does indeed have some credibility, if we compare to other mainland gas reserves (google RLMS Eastern Australia Gas Reserves and Resources)for an indication of other companies / basins total resources.