afr article, page-3

Agree. I have mentioned before that the majors aren't too worried about having to pay a few extra couple of hundred million for the ground work to be done and resource to be proven up. They look for established plays with large potentials for further reserve growth. The current drilling programme in the Cooper Basin (not just PEL94/5, but throughout CB), if successful, will throw a few cats amongst the pigeons.

There is little secret that their current cash holding is not sufficient to fund the entire 2012 drilling programme. So at some point, we will be looking at either another CR (hopefully at much higher price) or some form of asset sale/farmout/swap, or debt funding using our remaining reserve at Louise and Clearfork.

Anyway, successes attracts fundings. It's a self-fulfilling cycle. That applies for our EFS as well. So the next 2 wells in the CB and the EFS production well drill will be absolutely critical to its investment case. Failure at both could be fatal, though that is highly unlikely given past results from neighbouring acreages. Hence the best summed up as a medium risk, high reward play.

It will be interesting to look at the outcome of Sanchez's drilling starting in March, as well as TXN's EFS sale outcome. Both of which will also influence STX's short term fortune.

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