Ann: Webinar for Block 9 Update, page-239

In the Q&A (following the Webinar of 11.07.2024) AP noted that A3 would not be used to access 1B and the inference was that they were seeking additional [external] advice with a view to "resolving" it (ref the slides "Consider advice, formulate and action plan"). I believe that the issue was also raised with Andrew F in his coffee-and-chat session with AP, which is why AF then mentioned the acids. The company has also stated that the blockage was not mechanical and eluded to it being a mud reaction problem, which leans towards acid wash as a possible solution. My understanding (please correct me if I am wrong) is that the company is currently seeking external advice so as to ascertain exactly what the problem is (not just speculate about it) before designing and enacting an appropriate solution. As we haven't had any further detail since 11th July, we are all playing guessing games. Equally, I guess there is also the possibility they could sidetrack above Alameda and adjust the muds, pressures etc. Plan D for A3 could also be to access the upper sheets (produce out of Unit 1B, similar to A2) but I think this is a Plan D, E, or F given the expense of A3 (i.e. rather clean up Alameda or Marti that use this rather expensive, deep well to simply access the upper sheets).

At 2 cents (market cap circa $70 million) the market has all but written-off A3, and the EV of the upper sheets is deeply, deeply discounted (as the market is at the point of "Yeah, whatever you reckon AP: we'll believe it when we see it"). The company has flagged the Sherritt rig being available in September, so I think August will be quiet but September we will start to see some pad happy snaps from the company in preparation. Two pads currently with approval, and more to come - so the best case scneario (for U1B) is that Melbana starts shooting multiple holes into the upper sheets over the next year. Throw in some possible action to [attempt to] resolve A3, and there is enough kindling to light a fire under the SP from October onwards (at a rough guess).

Regards,

Kit.