It's the old question how much is enough to cover contingencies...

It's the old question how much is enough to cover contingencies on the first well. Its not a deep well , they also have well control information and we have been given a cost estimate of $US30-40 mil per each SNE appraisal well or $US5-7Mil net to FAR per well or $AU6.5-9 mil.

So we have enough cash to comfortably cover a blowout in costs of twice the expected costs of $US40 or US80mil which is $ AU104 Mil or $AU17.4 Mil.net. There will be delivery costs as also.

In sumary at $AU35Mil we have enough cash to almost cover two SNE appraisal wells running at twice their expected high side costs.

The problem we have is not cash for the first well, its the resuls of it, they don't need to raise before appraisal but they may decide to...

For me I'm happy for them to drill the first SNE well and take our chances of raising from a higher price but I have a feeling I won't get my wish...

Cheers Whisky