Clearly this is a commercial issue and not a issue for the regulator. If the flow rates are not high enough, then the project would not be deemed commercial and it will halt progress. That is not happening here.
When the company comes out and says that it is happy with the outcome of the trial and that a substantial reserve has been defined, by an experienced unconventional reserve group (yes, a lot of the other Australia companies use the same guy, eg Santos) then it is clearly apparent that the process is moving forward.
Just as a reminder, there is a 1,100 plus PJ 2P gas reserve defined on this project. That is not in dispute. The reserves definition implies a commercial return, which has been confirmed by the company with the release of the IRR and NPV numbers.
In general, 2P gas reserves can be valued at about $1/GJ in the ground (I will ignore the Ironbark example as it is near infrastructure and is a poor comparison, IMHO). This gives us a project value of over $1 billion, with no value on the 2C resource, which will have some value at some point.
The 2P gas reserve is more than adequate for a 30 year gas project, with a new pipeline to Moomba or MAP, as was suggested a couple of years ago with the signing of the HOA with APA. The reserve is also enough for a fertilizer supply. The fertilizer option is more expensive, but gives a superior return. I don't see both happening. Power will be generated on site for both options. Power will come from syngas.
Now, lets simply ignore the noise coming from aggrieved shareholders who got it wrong and sold at lower prices. I'm sorry for your loss, but your ongoing commentary here is getting boring.
Cheers, AL
LCK Price at posting:
27.0¢ Sentiment: Hold Disclosure: Held
(20min delay)