It's not often I agree with gasoroil but in this case I do - the...

It's not often I agree with gasoroil but in this case I do - the CVNs are highly likely to be worthless from what I can work out. The issue is that even though the report mentions proving up a "resource" it later mentions that it is referring to an "economic resource" at P50 level of confidence, and talks about needing to pass IRR hurdles. That is just a colourful way of saying 2P reserves IMO, because a resource that is economic is a reserve by definition and the P50 means 2P.

They could easily prove up a 2C contingent resource at Ooraminna, in fact they could probably do it right now if they wanted, with no additional E&A, but a 2P reserve is another matter entirely. They would need not just to drill a well but probably drill a horizontal and frac it AND conduct an extended production test with sustained economic rates before a certifier would give that 2P status. A company with an incentive to chase it could do that in 4 years but Mac is highly incentivised NOT to chase it until after the CVNs expire.

On top of this the CVNs are capped which further hobbles them. Even if by some miracle Mac do discover the mother lode and billions of dollars worth of gas supplies in the next four years, CVN holders will only get scraps.

IMO Mac is playing with a double-headed penny when it comes to the CVNs. It's designed so holders think they're getting upside but they wear all of the risk and share little of the rewards.