Ann: Hydrocarbon gas recovered & evaluation program forward plan, page-724

I think there is a bit of confusion around how you get gas from a seemingly residual gas interval in the PA, and how that result it interpreted by the company vs how the market interprets it. I appreciate you know all this KG, just adding my thoughts for others that are calling for a discovery / why didn't they announce a discovery etc and my opinion on how this sample came to be.

The Pebbly Arkose has residual gas in the formation. This means there is some gas sitting there trapped by capillary forces and is not able to move when you attempt to flow the formation fluid. The only mobile fluid is formation water, and they had to pump over 200ltrs of mud-filtrate before that fluid was as clean as possible for directing into the sample chamber (this is one of the drawback of using water-based mud, as the filtrate is miscible - mixes with the formation water. Its akin to adding cordial to water - it mixes really easily, vs adding cordial to olive oil - separates easily). So they pumped for ages until the resistivity probe in the MDT became stable and took the sample to surface. At surface, they are bleeding off pressure in the sample chamber and it has gas sitting in there as well as formation water. This is simply because there is gas dissolved in the formation water that has come out of solution when the pressure drops. This is akin to cracking a bottle of coke and getting CO2 out. In this case they had formation water with dissolved hydrocarbons. I have had plenty of water samples with gas dissolved in them that is liberated at surface. Your point about seeing a load of pink in the CFA would only occur for a water sample if the drawdown pressure was low enough for gas to come out of solution before passing the CFA. I am thinking this sample point had a very high permeability combined with the tools pump-out rate limitation such that only a small pressure drop was imposed while pumping and the water maintained the dissolved gas in solution. This appears to have been a surprise to the company as-well so I don't think there is anything nefarious going on here.

So that's the operations as I see it, then comes the interpretation of this information. This doesn't constitute a "discovery" in my eyes, because there is no mobile hydrocarbons being flowed. Only mobile formation water with dissolved HC's. Just enough to fill a few urine sample bags by the looks. What it does mean is that mobile hydrocarbons has been through the formation, which is the shallowest before the Forest / Dande formations. So this is confirmation that what they are seeing on the logs deeper down in the Upper and Lower Angwa as mobile hydrocarbons is real. Now they have some dissolved HC's liberated from a water sample that has residual gas shallower than the deeper targets so it has come from deeper down, filled a trap and then leaked via faults in this interval) and the water sample gives them a water resistivity to plug into the Archie saturation equation to confirm residual water saturation in the shallower intervals, and mobile hydrocarbons in the deeper interval.

For a discovery to be made, you would need to demonstrate mobile hydrocarbons and bring that to surface. In hind-sight when they were sampling on wireline and getting indications of cable sticking, it would have been prudent to open the sample chamber and fill it, even with mud-filtrate contamination), as they were flowing gas and then oil. I think they were going below the dew-point on a gas-condensate, which is why they were reluctant to take a formation sample, as it wasn't representative, but it would have been sufficient to be declared a discovery.

Now we wait for the sidetrack, which was the next option in the list of options given by the company before spud for getting this important sample (the last being to simply run a liner and sample when we test). Not going to get into which is right or wrong, but they are following what they said they would do is the point im trying to make.

My opinion only.