Hi mateWhat is happening in the Beetaloo/ McArthur basins in NT/...

Hi mate

What is happening in the Beetaloo/ McArthur basins in NT/ QLD is significant on a national scale. We are talking about trillions of cubic feet, billions of barrels of condensates and oil.

But this is not comparable to what is happening in the USA which already has significant infrastructure in place The “ new” areas are effectively in most cases being located where there was substantial historical conventional production…. so there are pipelines, gas treatment plants, refineries , supporting services already in place to allow facilitate drilling,completion , production and sales.

Right now in Northern Australia, most of what is happening is proof of concept operations and early results seem to be comparable to the US. This is very exciting but general commercialisation if these vast but remote hydrocarbon reserves will be difficult and expensive.

It will happen, it will have a profound effect on Australia’s hydrocarbon reserves( gas and liquids) but comparing BRK those companies like EEG, AJQ, TBN to name a few is difficult . These companies will have a much higher discount applied to their eventual reserves because for example, right now the chances of development would have to be 5-10% or some lower percentage, whereas for BRK the chance of development would be 90-95 % on a risk basis in any NPV calculation.

So just on development risk alone, the Aussie companies operating in those remote locations reserves would have to be 10-20 times greater than BRK’s or any other company that has reserves located within easy access to infrastructure, markets etc

Risk of development is just one of the risk parameters that has to be incorporated into a NPV calculation.

Hope that makes sense

Cheers.

Dan