Ann: Drilling Program Revised to Focus on Near-Term Production, page-7

The technical challenges aren't really that serious and it should never have come to this. Underbalanced drilling in depleted reservoirs is not a novel concept, the technology and the knowledge in how to do it have existed in the O&G industry for decades. The hard formation issues I haven't heard about before but companies were drilling these formations in the bottom of the Amadeus Basin stratigraphy in the 60s with tri-cone bits, I seriously doubt there is anything down there a modern diamond bit couldn't handle with proper planning.

So no, I don't think the technical challenges preclude going back to it. But whether it's worth drilling in the first place comes down to the prospect EMV which is always hard to estimate, I used to do EMV calculations as part of my job and you might say they are "the worst way to value a prospect, except for all the other ways." They are quite sensitive to uncertainties, and there are lots of uncertainties.

I don't have enough info to do an EMV for this prospect so I only have a qualitative idea.

PV Deep has some big advantages - the volume is reasonably attractive, the hydrocarbon system is proven, the fracturing in the structure is proven and the mechanism of that fracturing is understood, and the biggest advantage of all is that it's a stacked play that already has both a gas plant and a pipeline sitting directly on top of it.

But it has two big things against it. The first is it's much deeper than the Pacoota so permeability (both fracture and matrix perm) is a big risk. The second is the cost of drilling a well out there given the massive mobilisation distances and the fact you have to truck everything in. Well cost has a big impact on EMV and can easily turn a positive EMV into a negative.

Whether they will go back to it or not I don't know. It's hard to see how they'll get the money to spare and they've already sold down the producing assets so they can't do that again.

The lateral is the Pacoota is a good idea but the it won't deliver the volume that PV Deep would have done.