EXR

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11.5¢ elixir energy limited

Ann: Daydream-2 Operations Update, page-145

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tui

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29/04/24

19:51

Post #: 73566855
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Originally posted by jctrout ↑

Love the optimism but the announcement definitely DOES NOT say that the current resource is economically viable. It does however say that it COULD produce commercial flow rates (typical NY carrot leading approach to retail). EXR are still in the pre-proof stage of development.

What NY hasn't disclosed is the modelled resource volume (net recoverable) and ALL assumptions of the model. There is a lot of cherry picking and questionable disclosure in this announcement but net recoverable resource is the key point to commerciality, not initial flow rate. no permeability results announcement after the labs were returned should be a RED flag here, as pressure values used instead correlates to geological pre-conditions and not net pay. This is conflation and in my view, deliberate miss-representation of true value.
Reality is that the logs show a semi-conventional pocket of ~1.5m section producing the gas free flow, the rest is tight gas. Most of the >10% porosity mentioned is in fact the surrounding geology and not the sandstones themselves. - i.e. the gaseous sandstones holding the gas are more dense than the gross porosity numbers suggested by NY, hence the stimulation requirement and the non-commercial conventional flows. You'd also be a chance that the stimulation hasn't gone to the sandstones either because of this density differential and it's ended up in the coals surrounding them. Post stimulation results only increased flow rates by 0.2-0.3 mmscfpd, basically 10-15%, indicating that permeability is not positively influenced by this approach. That is a real problem for commerciality as the gains are marginal for the risk.
Also, density/porosity inversion shows that gross recoverable section may be Given the flow rates and response to stimulation, I'd say that this is a tight gas system and the permeability and pay is crap.
As such, you'd be lucky even with stimulation to get an aerial extent greater than 2km2 for the net pay here, restricting the interpretive net recoverable resource even more. high pressure in this section at this depth is a function of local geology, not analogy to any other supposed regions such as Perth Basin. Anyone who dares suggest this is definitely pumping their lot up very hard - another red flag.
All results thus far are unrisked values. Once risk is applied, you'd get less than 20% of the net pay from this well applied, so Grandis would need another 6-8 wells like this to generate a risked value of any real appetite for the big guys.

Happy for constructive feedback, but if you're slagging just to make yourself feel better after backing this dog with all the evidence in front of you, then sorry but your pride will have to take the hit.

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Hi JC,
I have been following your posts with interest. The last time I talked with you was at a NWE Cocktail function in Perth. It was a fun evening. You impressed me with your detailed knowledge.

I think EXR is on a good path to success.
The reason I make this post is that I do take exception to your claim that NY made a "deliberate miss- representation."
I have known NY for a very long time. An outstanding gentleman. You have miss-represented him.
Best,
tui

Last edited by tui: 29/04/24

EXR Price at posting: 13.0¢ Sentiment: Buy Disclosure: Not Held
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