30000 barrels per day at say $US60 * 365 days = $US657 million revenue PA from June from its north-east region reservoirs
Puffin's south-west region was estimated yesterday to have a similar to the volume of oil in the north-east region that underpins Puffin's initial development (perhaps another $US650 million revenue PA)
AdvertisementONCE considered too small to warrant being developed, the oil potential of the 35-year-old Puffin discovery in the Timor Sea's Australian waters has been substantially upgraded by its owner of the past three years, Melbourne-based AED Oil.
The upgrading points to a possible doubling in Puffin's oil potential by taking in the field's south-west region. The upgrade comes as AED works towards establishing Puffin as a 30,000 barrel-a-day oil producer from June from its north-east region reservoirs.
Puffin's south-west region was estimated yesterday to have between 38 million and 97 million barrels of oil in place. That range — with a most likely volume of 65 million barrels and a recovery factor estimated at 40-70 per cent — is similar to the volume of oil in the north-east region that underpins Puffin's initial development. The estimate has prompted AED to begin studies into a possible stand-alone development.
AED shares were driven 31¢, or 6.5 per cent, higher to $5.05 on the south-west revelation, which is based on results from two previous wells and a review of geological, geochemical and engineering data.
The market is now valuing the company at more than $770 million (fully diluted). Former Macquarie Bank and UBS investment banker David Dix brought AED to the market in a $55 million float in 2005. Mr Dix is executive chairman and the group's biggest shareholder (20 million shares directly and indirectly).
AED plans to drill an appraisal/development well in October — and cautioned that the "relatively large" ranges in the south-west's oil volume estimate reflected the degree of "uncertainty inherent in the current estimates".
BARRY FitzGERALD
AED Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
