latest research note from merril lynch, page-3

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Clarifying the appraisal objectives

One of the key points of note in this mornings press release was the clarification provided by management on the objectives for the initial appraisal campaign on
Poseidon.
Critically, Poseidon-2 is some 6km southwest of Poseidon-1 (Chart 2). This is in stark contrast to the appraisal approach taken by Woodside on its neighbouring Torossa/Brecknock discovery where step-out appraisal wells were drilled at circa at 1-2km intervals. This represents a far lower risk approach, although more time consuming and more expensive in absolute terms. In effect, by drilling at the extremities of the Poseidon structure (through P2) reservoir quality is often likely to be at the lower end of the scale relative to Poseidon-1 and (upon completion) Kronos-1.
Furthermore, one of the primary objectives of Poseidon-2 was to determine the gas-water contact and was deliberately drilled into the Plover C sand which was
prognosed to be water-wet from the outset (Chart 1). Whilst a portion of the lowest extent of the Plover B sand currently being tested may be water-wet, we
believe that the majority of the interval is in fact gas-charged.

We expect management to have completed remediation work on the P2 well in a matter of days and a re-test of the Plover B completed towards the end of next week. Given the new information provided today, there is strong evidence to support mechanical/connectivity issues being the root cause of the initial inconclusive test results.
Nevertheless, management has pointed towards there being a significant skin effect around the well bore. Thus, there remains a possibility that they are unable
to penetrate beyond this skin and induce formation fluids to flow into the production tubing. In short, we would not be immediately concerned if a successful test is not achieved in the B sand next week