I'm sure everything is on the table. Interesting to note that in...

I'm sure everything is on the table. Interesting to note that in the financial report they mentioned they were still on the hunt for opportunities.

Always hard to put a dollar value on these things - $55m over the 20 year life of the project gives a much lower NPV, which in turn is contingent on the discount rate applied. With $3m revenue a year, 20 year life 10% discount rate, and $5m upfront costs gives a NPV of $20.5m.

However this was calculated by dividing the stated 9 wells at 5BCF each by MEL's share, to give approximately 10BCF net. Then assuming $6 GJ net and a linear cashflow. Where this falls down is that $3m per year is the net revenue that would be attained by ONE well.

Any front loading of revenues, or any additional revenue in line with having more than one producing well rapidly changes the equation. For instance having $3m revenue in year one, $9m in years 2-4, $3m in years 5-14, and 0 revenue in the out years gives a NPV of $30.6m.

$3m in the first year, and then $9m in the remaining 19 years gives $66.1m...which to me is more likely given the 3 well start...just falls down with the total volume of gas currently reported.....that's the bit of the equation that doesn't stack up for me and gives me great hope that the reserves report will give quite a boost.

In a nutshell, so many moving parts it is near impossible to put a value on it it...but $20m is the bare minimum in my book - assuming $6/gj net.