Hi everyoneI found this article on the Society of Petroleum...

Hi everyone

I found this article on the Society of Petroleum Engineer's website:

www.spe.org/specma/binary/files/6859920Reserves_Audit_Standards_2007.pdf

It is a guide that lists how oil and gas reserves can/are estimated.

It is quite a detailed document, about 27 pages long! I quickly had a read through it and a couple of things stood out:

Firstly, there is no mention that you have to drill x number of wells to get an estimate. In fact, an estimate can be determined by a number of different ways.

Read this section to see what I am talking about:

"Article V—Standards for Estimating Reserves and Other Reserves
Information"

Secondly, it is interesting to note WHO is allowed to estimate a reserve. See this section:

"3.2 Professional Qualifications of Reserves Estimators"

John (Hasleby) is a member of the Society of Petroleum Engineers. Obviously for conflict of interest purposes he won't be doing the estimate.

See this link for what qualifications the director's of GDN have:

http://www.goldenstate.com.au/CorpDir.shtml

Is this a production/commercial well? Only the tests will tell definitively.

I believe that there is a distinct PROBABILITY that it is and that is why I own GDN shares. Note that this is a probability only and I stand to take a large loss if the well is not commercial.

But that is the risk portion of the whole risk/reward concept that goes with owning investments.

Good luck to all holders, lets hope we will be cooking with lots of gas from GDN shortly. :-)