junior oilers 2 february, page-20

re: junior oilers ..re psa for pj Re PSA will tell you what I know from talking with the company. Not sure about reserves but they believe there are two or three additional prospects at West Cameron to test in the same 6-10 bcf category. They need to analyse the drilling data from the three producing wells to assess potential of these other prospects. They would presumably drill them from the platform already in place so costs would not be that high. On production rates, each well has two or three different sands and they are producing from one sand in each well. When that sand depletes they move on to the next one. So production should not decline too rapidly. Production and transport costs are about 60 cents US. per thousand cf. Not sure about recoverable reserves but believe GOM average is about 60% (?). And then there is Ship Shoal, Llog can keep drilling there and it doesn't cost PSA a cent. They just take their 7% ORRI cheque each month. As production at Ship Shoal increases so does PSA's cheque.
Question is what does PSA do now. How will it "significantly increase its operations"? That I don't know, maybe we will learn more at the AGM in March. Cheers, JBC