Spoke to the company this arvo. Results of G#3 well entirely as...

Spoke to the company this arvo. Results of G#3 well entirely as expected. Company doesn't put out reserve estimates nor does it production test. Apparently yanks don't like GOM producers to flare gas. (learn something new every day!)

Engineers expect flow rates at >5 mmcf a day, not quite as much as I had hoped for but good nevertheless. The G#3 well intersected the uppermost sand intersected by the earlier and now producing Vermilion wells.

G #7 will target the next one down. Should be finished drilling in a fortnight and will then take another two weeks to complete the wells so first production around mid November.

All up, including completions, two wells will cost US$5 to $6 million. My guess is that the two sands will host conservatively 5 to 6 bcf, so all up around US$30 to$36 million for an outlay of US$5 to $6 million assuming earlier costs set against earlier wells. Not a bad return on one's investment. Whole heap more if nat gas prices move higher.

Asked about the onshore wells and was told they were deviation drills (a good sign in that they are entering old wells which bypassed gas plays because in the earlier days gas wasn't worth anything - and they are cheaper). Drilling should now be underway.

They didn't drill in September as planned because of mechanical problems with the rig. sigh!

Damned if I know why they don't put out info we need but that's the way it is. Guess Petsec is one you just have to be very patient with!!!!