annual report reflections

Some comments from the punters corner on BOW.

The end of 2011 target represents a 10 fold increase in 2P and a three fold increase in 3P.

The FY2011 goal of "Develop well completion methods to deliver commercial gas flows." is quite interesting. It suggests that either don't have commercial flow established as yet, or worse, they don't yet know how to get commercial flows and are still trialling completion methods. On balance, this is not the worst thing in the world, however it could add some risk to them achieving their targets as well as potentially reducing the prospective value in the company.

I was trying to tune my eyes to positive indications of early flows. The statements on page 12 relating to the pilot program at blackwater is positively worded, but not endearing. Bow has commissioned the first three of 12 planned pilot production wells for gas supply to the Blackwater Power Project. Early gas breakout continues to occur in all three wells during the dewatering process and testing of other completion methods across the field is scheduled. This statement appears to confirm that we might be waiting a bit longer for our results.


There seems to be some confusing mixing of FY2011 and 2011 meaning the same or different things. If 'in 2011' means Jan-Dec 2011, then it appears that a considerable amount of work will be done into the next year and only moderate results between now and next year. That is, there is some doubt over hitting 2P this year.

On page 16 Indicative cost estimates for various gas supply capacities have also been completed to enable offtake arrangements to further progress is a pretty aggressive statement. Discussing actual economics of supply is very positive.


Overall I thought it was a bit light on details for an annual report as far as detailing what is going on. More detail is contained in the ad hoc reports filed to the market.


Cheers,

SF