AGM, page-51

Mrdin,

There are too many factors at this stage to suggest a flow rate that is commercial.

I would guess that a reserve certification would occur if the sustained rate remains above 250-300 mscf/d over 3 months. That would then possibly facilitate the decision to plan for the drilling of Jaws 2. The certification of a reserve should allow for the project to be moved to the next stage.
I do think that to trigger further investment they would like to see it closer to 500 mscf/d or more though.

Jaws 2 would be optimized greatly over the Jaws 1 well and could produce much better results as they may change frac conditions, well lengths, pumping rates, plus many other things. So commercial for this well as a stand alone well is hard as there have been cost over-runs that wouldn't necessarily occur with future wells. It is more a proof of concept commercial flow in a larger development environment that we are looking for.

The better question is to ask what EUR is needed, and in what time frame, for wells to be commercial in a broader field development environment.

My hurdles are 250-300 mscf/d for reserve certification, then 500-750 mscfd for a strong indication of good field development characteristics and a level at which large capital could flow our way.


IMO