Hindsight being a wonderful thing but how much are NI responsible for the sp collapse, due diligence should have caused them to continually note DD-2 was an appraisal well, half funded by the ATO via a R & D grant, to evaluate new technologies to get gas flow. The type of new technologies the Americans have been doing over a decade with their shale gas drilling programs. NOT CAN THE WELL ACHIEVE FLOW RATES BETWEEN 2 - 5M CFPD, commercial rates etc. Techincally we could convert the well to a production well and likely get 2.5-3mcfpd.
We're in agreement the company too bears some responsibility, rather than getting on the flow rate band wagon (which we're all guilty of, me included), should have continually repeated the aim of DD-2. Sure, the free flowing gas was a bonus, and measured, but with was never part of the appraisal process.
As Neil has mentioned to many this hole is not a duster, it's not a conventional hole that's turned up dry (a duster), rather, an accumulation of poor contractor performance, delays, and deterioration of sandstones and coals reducing gas flow.
DD-3 will sort this out. I hope an American bidder is the JV partner, they can bring their own rig, CTU, bells and whistles on site and not be subject to delays due to equipment availability etc, and can show Shell, Santos, OMA and us how it's done. They've got a decade of trial and error under their belt, all they need is the data.
EXR Price at posting:
7.1¢ Sentiment: Buy Disclosure: Held
