bimonthly, dewatering, and reserves upgrades

Talked to ESG yesterday. The Bimonthly will be Monday. All seems to be going very well (my interpretation) with the laterals.

I was mainly enquiring about when we will get an update on dewatering. They said we won't as its counter-productive to report it regularly as flow varies (as lindo indicated) depending on what operations they might be doing .. as in when they shut-in the first dual laterals when drilling the second lot, to control interference/pressure etc. Suffice to say dewatering is going as expected (see below) and it confirms that the laterals will provide the best optimisation of dewatering and hence expected gas production.

The tri-lateral that is happening now is at a new location Bibbelwindi West(BW).. I had thought it was Dewhurst that Casey had alluded to in his talk on Tuesday. I should have realised this, as the Schramm rig is not working at Dewhurst yet and it had to have been doing something for the last 2 weeks since the second dual-lateral at Bibbelwindi was completed! They are really going for it at present .. that will be 3 lateral pilot locations that should be completed over coming weeks/months (Bibbelwindi, BW and Dewhurst), with a fourth planned for somewhere in the north of PEL 238 (in the vicinity of Coonarah or Blue Hills most likely). In fact the HGO quarterly said that up to a total of 6 are planned.

Regarding reserves upgrades ... they have been quoted as saying they expect to have sufficient water/indicative gas data from the laterals by “mid-year” (in latest Patersons update) .. that is ... within 3 months or so from the start of dewatering of the first dual-lateral that started in the first week of April, and I anticipate that they are “on-track” for that.... so July sometime. Then I guess it depends how long Netherall Sewell take to certify after that. So an upgrade definitely by 3Q, but an interim upgrade based on coring data before then remains a possibility (also as indicated by Lindo). Late July or during August is my guess for the major upgrade ... unless of course they are forced by an unwanted approach to upgrade ahead of lateral data being assessed. If yesterday's volume is a pointer that may be sooner rather than later!

H