Impressive momentum building for NWE. Like others have said, with NWEOB's ceasing trading today, the heads is the only way to now get exposure to LD-1 and all that surrounds our prime permits. It is clear that investors are scrambling to get onboard and I feel we will shortly be seeing new highs i.e. 3.5c+. In fact I see 4c as a very short term target, perhaps next week. Things are moving quickly now.
Wrt to talk of resource numbers, I personally would still be hoping to see a post flow test revised 2C number published by MIN/NWE. A 2P number won't be possible until further appraisal drilling and/or seismic is complete but a nice juicy 2C number is what will get me, and the market, excited, IMO. FYI for some that may want to know, 2C gas reserves is defined as the best estimate of contingent resources, those quantities of gas/oil which are estimated, on a given date, to be potentially recoverable from undiscovered accumulations. 2P reserves are are 1P (proven reserves) plus 2P (probable reserves).
A number of very knowledgeable posters have already established (reasonably accurately) that LD-1 could be a 2-2.5TCF discovery (initial estimates was circa 1.12TCF). This would further re-rate the whole Perth Basin. But to be classified as commercial, that's what the production flow test will determine. A production flow test will gather information on reservoir deliverability, reservoir fluids, reservoir pressures and potential reservoir boundaries, which is what is required to define the commerciality of this gas discovery. All of the data from drilling LD-1 including the production test data will then be reviewed by an independent reserves certifier to estimate the Contingent Resources (the 2C number). This should come approx. 2-3 weeks post completion of the flow test. I'm hoping they do this although I do recall Iain said in the IR preso that this number may not be forthcoming. We shall see.
I'm also speculating that we could see potentially some pre-gas sale agreement's from NWE post the flow test. NWE would have a lot of eyes on LD-1 and I dare say a healthy line of gas buyers keen to secure some gas from our permits. This would also provide some very healthy funding optionality for NWE as we enter the next stage of aggressive exploration and appraisal.
Go NWE!
NWE Price at posting:
3.2¢ Sentiment: Buy Disclosure: Held
