I agree with your assessment of the dilling target. From memory,...

I agree with your assessment of the dilling target. From memory, Ching-1 was also drilled at the edge of the prospect rather than the centre.

The price action of this morning has been dissappointing with traders expecting a 200m barrel plus find heading for the exits when this did not eventuate (although this is still within the realm of possibility). However, the high volume is encouraging with plenty of buyers to soak up the excess supply.

Overall, I think the find is highly encouraging in two reasons:

1) This second find is a different type of play from Ching-1 and to achieve a 2 out 3 exploratory success for WPL and HDR deserves a pat on the back. It demonstrate the quality of Mauritania as a new oil and gas province as well as the technical abilities of the operators. Those Direct Hydrocarbon Indicators must be flashing the way they should and pretty brightly.

Deep water oil discovery is high risk business and before the onset of 3D mapping technology, the success rate was about 1 in 10. Now it's closer to 2-3 out of 10 but is still a hit and miss game. For the operators to achieve a 75% hit rate (although Courbine was also a find, albeit an uncommercial one) is well, no fluke.

2) This second find, although not a stand alone success at this point (lack of info), is likely to be commercial as it would be tied in with Ching-1 in production. This would improve the economics of both finds. I am encouraged by Ted Ellard's reference to the 'large area' of the find (how large Ted? 10, 20 skm?) and Mauritania's lack of use of gas as an energy resouce. Is this a hint that the gas find in Banda is commercial?

Once again overall I am encouraged and belive that we will see the current price as a base for future HDR price extensions. Progressively HDR is reducing in risk as this Ching - 1 and Banda comes to production hopefully in the next couple of years. A long time adimittely but in the meantime there are many many other prospects in PSA ABC and Dana operated acreage to get the speculative juices flowing.