For all LTH, unless you have to sell tomorrow, nothing has really changed. Theres a lot of BS being peddled here, by people who may be trying to be genuine, but fall short of the competence mark and are fairly myopic when it comes to looking at the entire picture.
We all knew that the bankable reserve number was going to be a lot less than the 1.1 TCF geological resource number. This is par for the course. NSA has not altered the amount of gas that is actually there. They just have to put their balls and PI insurance on the line and come up with a number the banks can have confidence in - today, using todays info and uncertainties. Banks don't like uncertainty. Any uncertainty in the data is skewed to the negative side (eg. the seismic line does not show a clear reflector? factor it down; one of three wells indicates an anomalous water intersection? assume the whole field is water drive; etc etc) Thats how it works and for good reason - it is to give banks confidence and to let them know any changes are highly likely to be to the upside. Another good way to look at it is that the reserve represents a highly likely "minimum" number. Listen to SNs discussion carefully. With a bit of work (reprocessing seismic, shooting new seismic, etc) to remove some of the uncertainties, the 400 BCF could go to 800 BCF (excluding wagina) - any revisions to the reserve, are highly likely to be upwards.
In this business you can only use words like highly likely, likely, not likely etc...it s not a business of absolutes - at this stage of the project. Once you start producing, thats when you get better certainty around the variables. And the idea of conservatism at this stage is that you need to be assured of a "minimum" so you can get the money to fund the thing and pay back capital. And if youre conservative now, it means that you will get your pleasant surprise, as you progress with your investigative/data collection work.
Here is another example of what happens to resource numbers when you go from geological resource to bankable reserves, this time in the mining industry. And this is using 100-200 drill holes and hundreds of thousands of assay data points to define the subsurface. It is common to see a "global" geological resource of 200 Million tonnes "whittled" down to 120 MT, to satisfy "bankable" parameters. And if you look back with most of these, the bankable number generally goes up once they start mining. And it is good, everyone likes pleasant surprises.
So don't get thrown by the hype around this. The key thing here, is that there is enough resource defined as reserve for the bank to lend money so the project can go ahead. And from what we've been told, that remains the case.
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