Just wanted to put out some conservative numbers and see what...

Just wanted to put out some conservative numbers and see what happens.

What we know:
T2 flow rate = 2mmcd
T3 flow rate = 2.5mmcd
T2+T3 flow rate = 4.5mmcd
Gas Price = $10 per GJ
Well cost = $4.5 million per well
Operating costs= $5 per GJ sold including processing charges
Decline rate = 50 per cent per year (the decline rate IMO will be between conventional gas and shale gas because the permeability/porosity is between conventional gas and shale gas. I am still learning here. The decline rate is expected to be high first year but lower the following years. So this is conservative)
Well life= 3 years (conservative because the well will operate more than 3 years possibly 10+ years)

Results:
Flow rate Year 1= 4.5 mmcd (average flow rate in year 1 is about 3.375mmcd); flow for Year 1 = 3.375*365=1,231mmc
Flaw rate Year 2 = 2.25 mmcd (average flow rate in year 3 is about 1.688mmd); flow for Year 2 = 1.688*365= 616mmc
Flow rate Year 3 = 1.125 mmcd (average flow rate in year 3 is about 0.844mmcd); flow for Year 3 = 0.844*365= 307mmc
Flow rate Year 4 = 0.562 mmcd (wells are dead); Total flow for three years = 2,155mmc or 2.27 million GJ

Total revenue for three years= $22.7 million ($10*2.27 million GJ)
Revenue minus operating costs = $11.35 million
Costs for two wells = $9 million
Profit = $2.35 million for three years.

So, I am reasonably confident the project is commercial but no guarantees I omitted Tamarama 1 because it was an exploration well. Once commerciality is confirmed our worries are over. T1+T2+T3 will bring revenue and wells costs are already been taken care of.