Ann: Sugarkane Field Reserves Update for Debt Fac, page-10

re: Ann: Sugarkane Field Reserves Update for ... Sharejon,

I was idly musing. However, EKA has said that the depth of the EFS in Brioche is comparable to the depth in Sugarloaf. The keys to the sweet spot seem to be rich condensate at a high pressure and pressure is dependent on depth. But temperature also varies with depth and, go too deep, you'll find it over-cooked and consisting of a greater proportion of dry gas. So the sweet spot, so far as I understand it, is where the depth is great enough to break the oil down to condensates but not too deep as the HCs will have been broken down too far into methane and other light gas.

If the sweet spot is geographical, that'll be because the depth is right there but it doesn't mean that it can't be right elsewhere.

EOG's presentation of 8 September has a comment on depth and temperature (slide 4).

I fully take on board the point about not risking shareholder value, which is why I can't imagine them moving away from the EFS for some time. But, EKA could be right.

Nevertheless, the facility does look a bit hefty and suggests that they have some form of asset acquisition in mind. Land in the sweet spot is expensive although virgin infill acres would enhance the value of their existing acreage.

My principal holding is AUT and I can't imagine that changing.