brr points

Before reading the below, I would strongly recommend that you jump on and take the 22minutes to listen to David Johnson at the podium. There is something pretty calming to hear an MD as measured and in control as DJ is.

I have copied down a few salient points that I took away from the presentation that I missed yesterday just by reading it. Once again, it is not a transcript, just some key points that might be missed is in inaudibly reviewed the presentation.


-MELs directors are shareholders - and as such want to be prudent and sensible with how they develop their projects - no big bang rush.

-presentation at an infrastructure conference in a few weeks


CONVENTIONAL

-(SLIDE 5) - something I missed flicking through the pres yesterday - note the bracketed sections for the structural units equivalent in the Clarence Moreton (CM) to those in the Surat. The Surat Precipice, Evergreen and Hutton (equivalents of Ripley, Gatton, and Heifer, respectively) are all historical producers in both the Surat and Cooper basins.

-MELs CM area is very underexplored; Ratville was the last well drilled there in 1985, which was prior to tight/shale gas tech being developed.

-Tight Gas versus Shale Gas Tight gas is producing 40% of domestic gas supplies (from EIA SF reckons thats about TCF). Tight gas is being produced economically, more so than shale gas.

-Basin is deeper (yep, stop talking about it and get on with drilling it! :)

-For KF-1, rig reached capacity and they had to pull it out. The main concern affecting prospectivity were issues surrounding the trap and reservoir quality. DJ believes they have gone a long way to resolving this with the KF well. I think this is great news as they are big unknowns before you get on and drill a well.

-Created an extensive database of old and new seismic, old drills, Riflebird drill etc.

-(SLIDE 8) -The log shows the gas levels on the right side in green. The top section should be ignored as it was air drilled. The gas kicks as they hit each section are clearly shown.RED areas are net pay.
BLUE are gross pay.


-Back to how deep we actually got. One of the largest kicks we got was almost at TD. If you are familiar with perf guns, you will understand that they couldnt get it all the way down there to actually test this zone. Cmon DJ get your spade, grab Sarah Palin and drill baby drill! LOL!

-To anyone at the conference DJ indicates that they are currently at this zone here which on a BRR interview is pretty hard to tell where you are pointing. So if you wouldnt mind describing how far they have moved up the well that would be appreciated.

-The 3d structure diagram shows Ripley Road on top. The deeper gas zones could mean that migration could have fed quite a large trap which could substantially increase the size of the conv reservoir. But that is just hypothetical for now until we drill more right DJ?

-Some Shay Wape or Form (glad I am not presenting LOL)

-The rappville and tullymorgan logs show the deeper blue (Raceview and Laytons Range Formation) and orange (Ipswich?) areas that were hit on older drills. You can see that they are absent on the KF-1 drill. And once again, we are reminded of the deep potential of this basin : )


CSG

-The core issue for MEL is in maintaining a low cost for production

-Focus for CSG - Firstly, focus on developing a low as possible cost base to improve the cost per well

-Secondly, exploring the CM basin. Experiencing some trending which is good for field development economics.

Commercialization

-THREE goals, two near term, one further out

-RVPS 30MW currently negotiating native title and noise levels development consent before moving to FID in 2010

-LWPL 145km pipeline from Casino to Ipswich potential for gas swaps and significant entry into the Brisbane market following on from LNG driving supply North

-Out to the future - NRPS 150MW just going into concept studies


Things to watch for 2010 {nothing you shouldnt know or have already} guessed

-Reentry to structures at KF with wells completed as producers as well as seismic.

-FID on RVPS

-Environmental assessment study completed for LWPL

-CSG pilots at Corella

-Discushing J a partnership for PEL16 with a number of parties as a part of sensible capital management and looking at other downstream opportunities

Cheers,

SF