I'm not sure if this report has been posted here before. This Shale gas report is by Morgen Stanley and is dated June 3 2011.
There is a list of the players and the shale activities in Australia. I would like to bring to attention the last few pages in this report mentioning about the risk of Shale gas.
1. Technical risk a. Failure of wells to respond to fraccing b. Low flow rates c. Equip failure
Hopefully the environmental part of things as well as the logistical risk are more or less behind us. We know that risk 1a is gone. Now it is just the flow rates, equip failure risk and commercial risk.
In this report under the low flow rates risks, it mentioned - At this time, it’s not known what magnitude of flows should be expected from wells that have been fracced, but industry views are that flows of +/- 2 mmcfd from a vertical section of a fracced well would be ‘encouraging’. Low flow rates may result from a poor frac job, or maybe the rocks have a low gas content.
On the other threads, there guesstimates of 3 -6mmcfd or sort. I personally would like that sort of figures and when we do have that, this risk will be gone and the shareprice of Norwest energy will truly rocket.
Commercial viability risk is very much minimised with the recent release that Bharat Petroleum are keen to progress investment in Arrowsmith. This is another major tick in the box for Arrowsmith 2 with the commitment of a Fortune 500 company.
Lets hope with all these risks minimised as we find out in the weeks to come the flow rates of Arrowsmith 2, we will see an appreciation of Norwest Energy sp towards the 25c mark.
Have a very merry December Norwest shareholders and hope the report will be a good read, jus like tht agm writeups and the video by Peter and Dr Zoback. It is great that we are having all these great posts. Thanks.
NWE Price at posting:
7.5¢ Sentiment: Buy Disclosure: Held
