Ann: SM69 E2 Well Commencement, page-124

Chris6> Wow gas hitting $4.9 al most over $5 that's now at a all time high... very good for bye

Boysy1 (on OEL forum) > .... Gas price futures have pulled up as well >$5 for the next 6 months and then mid 3s all next year moneys to be made over winter why wait til 2022 to drill .....

Boysy1 raises a good point. Would it be smart for BYE management to lock in NG prices for all of SM71 and SM58 unhedged gas production for the next six months at $5 and use the current and unknown drill as the cream on the cake if the spot prices keep rising to $6?

That is, lock in the higher price for expected NG production from the established rigs, and gamble with the new drill on the spot market as a wild card?

Now a grown up like oldgeo can correct me here, but my understanding is that when you drill a new deposit, you get a lot of gas at the beginning. A bit like opening a shaken bottle of coke. So, this drill could be very good for us as it takes advantage of the higher prices. Assuming of course it's not a duster. While an agreed price of $5 for the previous established production for the next six months could give confidence and certainty to the cash flow of the company, making another drill more financially certain.

Now I not saying this is a good idea and I dare say I will bitch and moan if the NG prices hit $7 (as per the rest of the world) and we have sold ourselves short at $5. But I thought it was worth raising.

I found the link below interesting with regards to the market prices and why the NG price keeps going up. Higher prices are a great incentive to get things back online. But the power cut may mean the competition can't restore the previous supply. After all wells do not like being switched on and off again. Do we stick at $5 or twist to lock in even higher prices later? The gamblers dilemma. Sounds like a decision well above my pay grade.