Ann: Atzam 5 - Drilling Update , page-104

jandj...

At your request...some NPV numbers to think about below.

These are why, when I read comments like...

"the CTR share price is about right for where they are at"

or...

"...all those delays were mainly due to cash shortage"

etc...

I get the feeling many here posting are apologists for the Company, who don't really understand value dynamics.

I suggest those at CTR are well aware of the value of this field...and of the individual wells in particular.

There are companies drilling fields no more than 2.3mmbl's in size...total...and they have to drill 5-8 weels to extract it...we get this much oil from a single well!

These numbers are closer to what you expect from off-shore drilling...but in our case, without the up-front costs.

Each and every well will likely have a similar profile...if not better...and remember the washout area in this well (C18/C19) are not included in AT4's reserves!

If we get anything even remotely similar in AT5, we literally times the field reserve size x10 on a typical step-out and interpolation basis.

Add C18/C19 to this mix and we are looking at bigger numbers again.

Looking at where AT5 is positioned, I suspect success will put numbers north of 30mmbl's for the field (RF30% basis).

Not mentioned in any market correspondence, but it appears to me the seismic has been out a fair bit, with AT4 intersecting the formations high to prognosis...I suggest AT5 has been positioned to take advantage of this.

It is also one of the reasons C17 is producing under its own pressure...plenty of water head pressure forcing it way up the formation.

Also not yet mentioned, though I suspect postulated...the "6 foot" section currently producing from C17 in AT4 may well be tapping into the entire C17 formation, either by fractures or for all we know, up the side of the casing.

The fact there has been insignificant loss of pressure from such a narrow zone, that would not normally produce for so long under its own pressure may be suggesting this is the case.

If so, then we may be able to literally double the recoverable oil (P1 RF30%) they are currently using for this producing zone.

But when will they crank up the production rate?

Current reserve profile

And now...some examples of NPV calcs for the currently producing zones alone...

1. Using 170bbls/d (current production)
2. Using 466bbls/d (expert advice production)
3. Using 1000bbls/d (production from multiple zones concurrently)

First 2 assuming 20 years life and trickle of just 20bbl's per day at the end of their profile.

The third also assumes 20 years, but with 40bbls/d at the end of its life.

Note, the 466 bbls/d model assumes more than 543k recoverable...which is more than possible from a well with 2.3mmbls P1 reserves. I remember KLZ had a field (Thailand?), that produced something like 30mmbl's over the years (and was still producing), yet only had reserves of 20mmbl...it was thought the reservoir was being replenished from a deeper off-formation feeder, or that the initial reserve calcs were way off. The latter is not difficult to imagine when you know how many variables go into their estimation, especially when using the older 2D seismic.

170bbls/d (C17 zone only - produce current reserves)

466bbls/d (C17 zone only - produce more than current reserves)

1000bbls/d (All zones - portion only of recoverable reserves produced)

Cheers!