Ann: Holdgate-1 Update 25 June 2012 , page-8

Jennym,

I am of the opinion they are not drilling deep enough.

Now my lack of experience with drilling in Australia may
be a hindrance here but I think I can convince you.

I have been involved with a few companies (investing) that drill in the US. I have done extensive research on the prospects and what depths they are finding oil/gas.

Texas - 5 years ago was thought to be drilled out and anything worth while had been found. How wrong they were!

Permian Basin - drilled to buggery around 7,500-8,000ft (2500m). Renewed interest now in that same area drilling 10,000 - 12,000 ft mostly with horizontal drilling up to 5,000ft laterals. Below 8,000ft they have found several new zones and are paying a premium for the acreage. 650 - 1400 bopd is not uncommon.

BHP recently purchased Permian Basin acreage, although they paid too much for it as they do not want to find gas, its not worth jack over there.

Louisiana and Arkansas, drilling beyond 10,000ft, North Dakota drilling 12,000 - 13,000ft before commencing the laterals. Shale Oil, too hard (tight oil) excuse me, horizontal resulting in up to 3,000 bopd IP, although it has a steep decline curve to around 500 bopd.

The seismics they use are not a road map - only a rough idea and open to interpretation in a big way. Mostly they compare the seismics to what the pointy end of the drill rig finds. That info is then transferred to the next well drilled.

You might ask why compare US drills with Australia, well you have to remember they are using US data as well, although it seems to be 20 years old and not the cutting edge info/technology on hand now.

From memory Moreys tight gas zone was found 15ft from the TD around 2,000m

So no, I doubt they are drilling deep enough to get a definitive answer and will regret it in years to come.