No one likes additional expenditure but the oil is there by my back of the envelope calcs should increase cost to OEL from $8.65M estimated to $12.35M (+42%).
to cover overrun at the top of estimates would be roughly a quarter of revenue (1500bopd * 0.4025 RI * $60margin (75 oil less 15 opex).
SM71 field is 6.5 years into production.
Plenty of risk to play out re redrilling and completion and flow testing but @1.4c less approximately 1c cash ($42M less $12M costs = $30M or ~AUD$45M) post costs noted above EV works out at 0.4c or AUD$20M ....
bought more at 1.3c
OEL Price at posting:
1.4¢ Sentiment: Buy Disclosure: Held
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