Ann: Operations Update, page-3

resulting in minimal loss of production potential from the well

I don't think that is what the announcement states or infers. It simply states that the ratio of gas-to-water production in the upper Patchawarra of Vali 2 is much higher than the lower Patchawarra. There is no mention of the quantum of gas production in the upper, and therefore it is quite possible that the actual quantum of gas production in the upper Patchawarra is low to very low (but with even lower water production), and that the main gas production initially measured was from the lower Patchawarra (prior to it producing excess fluid). And if main initial production was indeed from the lower Patchawarra then plugging it may result in an uneconomic well due to much lower flows from the upper. That's the worst-case scenario of course but it is just as likely as the best case scenario that you have assumed.

Vali maintained average production of 2.71 MMscfd raw gas for the three months to 30 September, a rate consistent with the natural decline exhibited by stimulated Cooper Basin gas fields which characteristically feature strong early production, a sharp initial decline and then a long tail of relatively flat, production over many years.

So after the initial sugar-hit of 2.71 MMSCFD (average), expect much lower flow rates long term. This is as expected of course, but the question is whether the much lower long-term production (perhaps 10% or less of initial production?) will bring in enough revenue to even cover the costs of maintaining the infrastructure, let alone leaving any cash flow to pay off our debt.

Clearly I'm not convinced that MEL have pulled themselves out of the quicksand yet.