Strongy you may have missed the point. I am not trying to be...

Strongy you may have missed the point. I am not trying to be generous I am trying to be practical!

$3/Mcf Netback (I "hope" at least) is when we are selling LNG at $12/Mcf (I "hope" at least) and this doesn't occur for quite some time.

$1/Mcf Netback is when we are just selling gas today at today's pricing - those figures came from Santos' latest qtrly.

I was not counting the capex of drilling cost in the netback for this. It is counted in the Netback/NAV from the other post# 9072908 which has the valuation table I am using. That was an all up number guess which included full F&D costs.

Gassed was referring to early cash flow and selling gas right away - and that return is not so generous as its not for selling LNG and I'm using what Santos gets selling Cooper Basin gas (and that does have some NGLs in it - Ethane).

Likewise, Gassed's post # 90756355 where he gave me a couple of questions is grossly incorrect - by a factor of 1,000 - that really he ought to self moderate it.

I'll repeat because it fundamental to understanding.
Gassed:
"Question 2. The GSA is for 2.2TCF over 20 years. That equates to 110MMscf per annum. Which equates to 300Mscfd. That is correct isn't it? Now, with Halifax-1 alone probably delivering above 3MMscfd and ICN's "share" being 40% of that i.e. 1.2MMscfd, and you wouldn't imagine that Halifax-1 will be the only one that has gas in 855 would you, wouldn't you reasonably consider that ICN's share in 855 alone should be able to more than adequately satisfy both the conditions precedent AND the actual 20 year supply of the gas?

Cmonaussie Answer:
2.2 Tcf = 2,200 Bcf = 2,200,000 Mmcf
Over 20 years that means 110,000 Mmcf per year
That is 1,000 time more than Gassed 110Mmcf per annum - so do we see where thoughts of 3Mmcfd from 1 well become lost in reality.

Just like the answer re prospective resource to reserve conversion and EUR per well and how many wells to drain reservoir - but I did post links for y'all to read to become more comfortable with the data.


How many wells for ICN 40% share to be 110Bcf per year for 20 years?

At this stage can't answer. However if you look at the comparison being made of the Cooper Basin, then I'll post up Devon Energy (which I hold - and they were the original developers of Barnett shale having acquired Mitchell Energy who starting the whole gas fracing game)

If Cooper is 50% better then may need at least 50 wells (using an EUR of 5Bcf per well at 40%) - but ICN needs it at 110Bcf/yr every year for 20 years and shale gas wells do not produce that way. See picture below.


Note the EUR and flow rate and cumulative production.