clarification from company (opl), page-15

the difference between australia and america
I'm goanna preface this by saying I dont know anything about Jack Hamer. This comment applies as much to Tomahawk as it does to OPL etc.

Here in Australia, by American standards just about everything we drill is a high-risk, high-reward rank wildcat.

When they come in, a 'reasonable' oil flow is 1000 bopd on test, but we dont start getting excited until it's 2500 bopd, or a couple of layers at 1000+.

As far as gas goes, anything under 20 bcf is non-commercial, and an indication that your management crew really arent up to scratch.

So, an Australian company with 3 hits in a row - woo, hoo, $100m valuation here we come, and a four-, five- or six-bagger is appropriate.

America, on the other hand, has had mind-boggling amounts of drilling in the past. Ohio has had 286 000 wells drilled in it.

Two Hundred and Eighty Six Thousand.

The Cooper Basin has had, what ... maybe 150 wells, including step-outs ? Include Queensland and we'll probably take it to 250, tops.

Punch that many holes in the ground, and you tend to have a pretty good knowledge of the geology.

The plus side is that you'll tend to hit more often.

The minus side is when you do hit, you'll tend to have much less spectacular flow rates, and therefore less spectacular cash flow.

Gas is a bit of an exception ... one million cubic feet of gas a day is a good payday when you need four miles of 2" pipe to connect it, and you get $5 per thousand cubic feet cash from the spot market.

So what I'm saying is that when a US-based oiler says they've had 'good' success, they probably mean something closer to 100 bopd to 1000 bopd.

Ian Whitchurch