Lockyer Deep gas field appraisal drilling program, as proposed by Operator – Capital Stewardship, Decision Quality.
· Lockyer-2
· North Erregulla Deep-1
· Lockyer-3
· Lockyer-4
A Joint Venture where Operator can be effectively challenged by their minority partner, especially where their minority partner can influence decisions on things such as appraisal well locations, in my view leads to higher decision quality and better capital stewardship.
So, hypotheticallyand in my opinion only, if I was an independent NWE board member with the interests of my shareholders as a core value, not priority, because priorities change, in an appraisal drilling program I would always challenge Operator on where best to deploy Joint Venture capital to optimally “prove up”, for example, the size of the Lockyer Deep gas resource, thereby providing the Reserves Certifier with the most reliable and meaningful information to make an initial reserve booking. As such, I would support the Lockyer-2 (appraising the down-dip field extension) and North Erregulla-1 (appraising the south easterly field extension along strike) locations. I would not support the Lockyer-3 location on the basis that if Lockyer-2 is successful and down dip of Lockyer-3, a well at Lockyer-3 would likely have only a modest impact on the initial reserve booking. I am simply challenging Operators decision quality on the Lockyer-3 well location and therefore where-best to spend appraisal dollars / shareholder money drilling Lockyer-3 in "prove up" more reserves. In my view, a better location for Lockyer-3 would be in EP428 where there are currently no appraisal wells planned, but where nearly half the potential gas resource exists. An appraisal well located near the blue star in EP428, if successful would in my view provide the Reserves Certifier with reliable information to book a higher initial reserve volume for the Lockyer Deep gas field than the current location proposed by Operator for Lockyer-3. I would expect our NWE board to do just this........
Kind regards OldGeo
