Ann: Walyering Reserves Statement, page-7

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Justadabble

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23/09/24

10:11

Post #: 75790852
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Originally posted by 618: ↑

The small net contribution by W7 to gas reserve isn't that surprising based on the flow rate achieved during the test window. The surprising part is obviously the much smaller gas in place volume. It's about 25% downgrade by my estimate, with W7 offsetting about 5%. What I am surprised about is the lack of reserve update for the condensate from W7 which is where I had expected a material increase.

@Justadabble I now understand why they want to drill Walyering East or W8. With 1P of 25PJ and contractual volume of 32PJ, I think SN feels they need to prove up a bit more reserve to ensure they can be certain of fulfilling those contractual obligations. You can roll your dice with 2P with uncontracted open market volumes. Additional reserve proven up from W8 will also give them more confidence to sell more into open market once Mondarra crossing is open for business scheduled for next Feb.

Anyway, without any further reserve addition to the current 2P, I've calculated field life to be 5yrs with decline starting in 2026 and peak production rate of 30TJ/d. Relative to my original estimated reserve of 65PJ (I'd assumed 7PJ contribution by W7) and a field life of 6.5 years, this has removed about 2cps from DCF valuation - which I currently have as sitting on 55cps after factoring in for export volumes and window etc. Still verifying the model due to extensive changes made.

618

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Agree, but let's keep everything crossed that MAQ would not be concerned by this update from a lending perspective. I look forward to the Sep quarterly for confirmation that Tranche A, the refinance, has been completed. I think discussion about plant upgrades to increase throughput at Walyering can be permanently closed.

STX Price at posting: 22.0¢ Sentiment: Hold Disclosure: Held
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