How much oil in Phoenix South and more, page-40

EL

The hydrocarbon phase at reservoir temp is gaseous, so flow from low porosity/permeable rocks will be OK. That is the best of both worlds, as oil in the reservoir would have suspect flow and gas at surface would be worth a fraction of the oil.

Reservoir continuity will always be an issue, as rocks differ over distance (ie dont assume a layer cake mentality, as its the easy way out). Pressure testing, seismic amplitude work and good geology will help, but at this point we only have a single intersection for rock parameters. Therefore we will tend to bias our thoughts back to the well, as we have no other firm data aside form the distant wells.

At the time of the discovery, Apache released public P10 OIIP numbers. My experience suggested they were conservative given what I knew about the play and the size of the feature. It is in their nature to be conservative at this stage (at a geologist level) although the sales case may bring out some more bullish numbers. I was thinking 300m Bbls OIIP was about right from the data I had.

On valuations, we also need to be careful. If we calculate an NPV, it still needs to be risked, and then discounted as the whole market is trading, IMHO, at a discount of about 25%. And that is even before we place a value on P-1 and ROC, which are still contingent in nature.

I have a reasonable holding, which is now fully carried, after buying some both pre and post discovery and selling into the hype. Happy to hold on at these levels, but will wait for the next event to see a way forward.

WN

No need for an apology. All good.

No advice here, DYOR.

Cheers, Al