I think PSA might have a PR problem bigger then Saddam - are...

I think PSA might have a PR problem bigger then Saddam - are they going to repeat their mistakes of the late 90's. I think with Eremia the investment 'pendulum' has swing definately to ARQ in the PSA v ARQ comparison.

The following from today West Ozzie ...

"Arc leaps on new Perth Basin strike

By John Phaceas


ANOTHER big oil strike in the Perth Basin set the share price of local oil explorer Arc Energy alight yesterday as investors bet on a further expansion of Arc's Hovea oil project.

Arc shares rocketed almost 27 per cent, or 14¢, to close at 66¢ after the company reported drilling had intersected an oil column measuring at least 15m to 18m at the onshore Eremia-1 well.

Arc said the well, which lies immediately south-east of Dongara and just 2.5km from the producing Hovea field, would subsequently be deepened 600 metres to intersect reservoir targets known to host gas at Hovea.

Managing director Eric Streitberg said the discovery extended a remarkable string of discovery success in the Perth Basin, which he said was a "conclusive demonstration" of the prospectivity of Arc's onshore acreage. Arc holds 50 per cent of both Eremia and Hovea.

"There have now been three oil discoveries and a gas discovery in a row in the immediate onshore area," he said. "This is an outstanding success rate and is particularly exciting as Arc maps up to another 20 leads and prospects in the area."

Mr Streitberg said the discovery was particularly important, given Arc had proved its ability to move from discovery to production in "record time".

Hovea, now producing 3500 barrels of oil a day, had gone from a greenfields site to a production facility capable of handling 5000 barrels a day in less than six months and had already produced more than 300,000 barrels, he said. Recoverable reserves at Hovea have been estimated at 5.2 million barrels with the potential to grow to around 14 million barrels. The company considers Eremia-1 to be a look-alike for Hovea with similar reserve potential.

In a client note earlier this month, Perth broker Hartleys said Arc's prospects for additional discoveries in the Hovea region offered strong scope to boost reserves and production.

Although the market tended to focus more on wildcat discoveries in the offshore Perth Basin, most notably the potential 100 million barrel Cliff Head field (of which Arc owns 7.5 per cent), Hartleys said discoveries at Hovea were more likely to generate cash flow in the near term.

Arc's partner in the Hovea and Eremia fields is Origin Energy."

++++++++++++++++++++++++++++++++++++++

I'm holding both but thankfully about 80/20 ARQ/PSA!