Some thoughts after reading the document in a bit more detail…...

Some thoughts after reading the document in a bit more detail…

Good News
- Staff, Admin & employment benefit costs have all come down. Revenue is up though.
- Average oil prices have increased from  $48 to $68 in the last 12 months (and Mereenie produces Oil) . Imagine it has stabilized at about A$70 at present.
- NGP construction is currently still on schedule
- Exploration costs have really been reduced, as is evident in the >50% exploration cost reduction compared to last year ($0.6M vs $1.23M).
- Final payment to Santos of $3.3M for Mereenie made. This should help future bottom line figures now that further payments are not required.

Bad News
- As a result of the reduced exploration expenditure mentioned above, no exploration was reported at Mt Kitty, EP115 , Palm Valley Deep, Ooraminna or the Dingo Satellite areas. Although not great, like Total’s exit imagine it’s not so important while we try to firm up the current best reserve options at Mereenie.

Relationship with Mac Bank
What Mac’s next move is what we are all waiting on, but perhaps they may come in for a greater equity stake. Interesting what SP valuation that comes in at, considering they previously considered 30c acceptable (and that was before the last round of reserve certifications and the NGP was committed).

Also be interesting to see what protections are in place from stopping them creep in further ownership, as it’s worth noting Macquarie has 2 lots of Options outstanding; a parcel of 30M @ 45c expiring 15 Nov 2017, and another 30M @20c expiring 01 Sep 2017. Perhaps these would need to be cancelled in any deal?

Status of GAP?
Looking at the subject report from last year, it was noted that Stage 1 of the GAP (Gas Acceleration Program) had been completed (certification & review of existing data).

Does anyone know the status of Stage 2? This was for “refining & optimizing Stage 1, including possible production testing” which should “increase further reserves available for contracting”.

It seems from this latest report we are gearing up for Stage 3 (drilling & production testing on the Stairway formation), so would like to know what happened to Stage 2?