Ann: Oil Focused Canning Basin Transactions, page-225

Hey Ed, all good points, although, through owning and following ROC over the past 10-12 years, they, have always focused on profit over production, i.e, perhaps a little bit like how NST operate their business (they want to maximize production rates and reduce costs etc).

So when you say that Ungani West is small, sure, 1-2m barels recoverable is nothing special, I think a little differently, when you look at the rate of return on the investment, it (assuming its a success) becomes a lot more interesting, i.e, $4 to $5m to drill (I think with 3 wells being drilled in succession, costs will def be less than $5m). Even if they only find 1m barrels recoverable, after costs of perhaps $35-42 per barrels (including shipping), the company would generate approx $50-60m over 3-4 years. The numbers easily stack up, and that is why I feel the free carry for the well is a nice little addition to BRU. If it comes in, then perhaps producing at 600-800bopd, would add 300-400bopd to BRU. Suddenly, its production is getting closer to 2000bopd (even closer again when Ungnai FW is also added, and perhaps Ungani North).

@bhutos - good to have your view on things. You make some excellent points and cut to the chase of much of the discussion, is BRU an explorer or a oil producer... Jop wanted the later, long termers want exploration, but... with someone else paying after so many cap raisings, failed wells etc etc, and traders want wells drilled now now now.

Also, very very true about the deep wells like Rafael, they may never have got drilled otherwise, farmin or not. I won't even start on how BRU wasted its chance to drill some of the Acacia prospects (potentially 200m barrels recoverable!, Twiggy has them now, not that he will drill them).

@cruiser51 - I somewhat disagree about Broome, if ROC is able to, ah, help focus BRU, then Ungani (great Ungani) could justify the Broome option. Especially when the risk is spread 50/50, plus I don't think its all about the magical 5000bopd, its more about reserves, and the production rate. Having Broome would allow the company to hedge oil and reduce risk. I am sure we will be talking about Broome end of year, but whether its going ahead by then I of course am quite unsure as we still, have yet to see what effect ROC will have on the J/Vs plans etc.

Regarding Ungani's current peak production rate facility wise, this announcement last year states oil handling of 4900bopd, and fluid of upto 8000bopd. Which even with a 20% water cut, shows to me that if the wells can run at higher rates, extra trucks brought in, the... close to 5000bopd is achievable with the current infrastructure. Nov 2017 Op upate
Obviously this can be increased at a later date, as they have quite a bit of room at the facility from the photos they have provided regularly.

@jophda - All good mate.
I take your point about the farmin, but as I mention above, Ungani W is more I think in line with your thinking of focusing on profit first. The $15m you mention is about right as it will fund 3 good sized exploration wells over the coming 12-14 months. Yep, traders will enjoy BRU a little more, but... on the other side of things, shorters and manipulators might find it harder to dent BRU now that its has its cash moat.

Slightly off topic, I wonder what Hartley's thinks of all this. Missing out twice on cap raisings.