Uncover the TBN Matrix, page-8

HI All,

Thanks for your posts. I thought much of my assertions were self-evident, but understand there are varying levels of base knowledge in this forum so hopefully I can clear up some of the confusion below. Let's first tackle one item with the most disbelief - the choke rate.

To answeryour question, TBN disclose teh conservative choke regime at the bottom of page 2 of their SS-2H ST1 ASXrelease on 16 June “During the 30-day production testing period,the choke was opened from 10/64” to 40/64” at staged intervals.”

TBN also "elaborated" on Page 6 of the associated 16 June webinar presentation in the bullet that read:

“− Performed less aggressive choke schedule (vs.SS-1H) to protect early flow back fracture connectivity and maintain higherflowing wellhead pressure”

You can seethe impact of choke management on the shape of the decline curve on Page 6. Unmanipulated curves would have a nice exponential decline curve like T3H. ST1 was said to have been choked back initially, and then slowly opened over the test. It appears they opened it up too fast because the flow actually increased in rate over the first 5 days, and again briefly on day 10 (something unusual for these tests if choke isn’t being manipulated – T3H IP30 looks to me like a more traditional IP30 test curve for shale.

I don’thave an issue with testing a well with various choke sizes, because experts in theindustry can and will adjust for the choke size when assessing the results. But perhaps TBN should explain to the average investor that the results might not be comparable to a well that is on full open production for 30 days.

I think thechoke regime would have 1) elevated the IP30 ending flow rate because you keepsome extra gas/pressure in the formation until the end, and 2) reduced thedecline curve by lowering the initial production and increasing the ending rates,thus flattening the slope.

But promotingthe test outcomes as a “win” without explaining what the choke regime impactwas seems a bit “confusing” for the market to say it politely.

Let me knowwhat you think… Any reservoir experts reading this that might be able to quantify this impact on the IP30 exit rate and decline curve?
As for the other various questions and resistance, they are already laid out in my earlier posts. but in summary:
a) the NT gas market is 70 TJ/d and already covered. another 40TJ/d from TBN, 30TJ/d from Empire, ++ from other Beetaloo appraisal projects, plus any further ramp up, is multiples of the local market (hence "flood") and would obviously need to get exported somewhere outside the NT.
b) Pipeline transport from the NT to the east coast is expensive (far far more expensive than the US due to the favorable regulations for APA - another issue entirely which plagues AU gas consumers) and that means a much much lower received price at the well head. i already showed in an earlier post the actual pipeline tariff links and calcs to transport gas to Wallumbilla as being >$5/GJ, that's more than 1/3 of the Wallumbilla spot price ATM. it gets worse from there if you want to go further south to the short part of the market.
c) you're missing a few steps on the gas spot market comparison. Wallumbilla spot is say AU$13/GJ. Thats $8/GJ for the Beetaloo net of the $5/GJ transport cost. That AU$8/GJ is currently US$5.2/GJ. HH is currently US$3.38/GJ (adjusting for mmbtu/GJ). Gas Price difference is therefore around 50% more in AU for the Beetaloo. Gas Development costs in the NT are 2 x more - minimum.
d) If you think the NT has an attractive low-cost environmental / regulatory framework compared to SA or QLD, much less the USA, I suspect you haven't been investing in the AU O&G sector long. Read the Pepper Regulations which are specific to the NT for Beetaloo development - all 144 were adopted, and when you read them (I have) you'd agree the NT is now one of the most expensive places to get an O&G project going, and I'm not even factoring in the costs due to teh NT's remoteness and lack of services etc.
Politicians and Company Management have been known to spin things from time to time.
Anyway, if you have any informed comments to add, feel free...