realsing what todays announcement means

Today we had an announcment.
Today our shareprice went down out of character.
Why?
ASX profit taking and bigger players leading the charge...
Lack of thoroughness when interpreting of our announcment...

Here are some pointers for anyone who has no idea what todays announcment spells out, indicates, prophesises etc(actually its me who will do the prophesising after publishing some Frac Facts).

Noone actually has any reason to absorb the annoucment with any negativity - unless you had to sell by today and your investment timeline is messed up.

For the rest of us, this is the situation:


As i said previously, the drill rig which operated successfully wouldnt have been moved off our site until the public holiday of new years had expired.
Then, we would have had between say 2nd/3rd Jan to the 8/0th Jan where that rig was finally removed and the site was cleaned up.

Only then could the pipeline/infrastructure be layed and married....which i estimated would take another week, to around the 15th Jan...

After that pipeline is operative they would be sending gas to market - as mentioned in the anonucment - and simultaneously flow testing it for a market annoucment.

That process is unfolding now and we have therfore advanced substantially.

"Target advances Highway 71 Project towards production" was the title of the announcement today therefore.
And the two key points were:

a) Completion and flow testing operations commence at 1st Meek B sand in Merta #1 well;

b)Construction of production facilities at Merta #1 underway;
'b' is simple to understand (regarding the marrying of the pipeline to market line) so lets move to a)






Completion flow testing and fracking are the relevant points to consider in Point A.

DEFINITION (Fraccing/Fracking) of Fracture stimulation process:
http://www.osha.gov/SLTC/etools/oilandgas/glossary_of_terms/glossary_of_terms_f.html

"frac fluid (noun):

Is a fluid used in the fracturing process
(for example, a method of stimulating production by opening new flow channels in the formation surrounding a production well).
That is, under extremely high hydraulic pressure, frac fluids (such as distillate, diesel fuel, crude oil, dilute hydrochloric acid, water, or kerosene) are pumped downward through production tubing or drill pipe and forced out below a packer or between two packers.
The pressure causes cracks to open in the formation, and the fluid penetrates the formation through the cracks. Sand grains, aluminum pellets, walnut shells, or similar materials (propping agents) are carried in suspension by the fluid into the cracks.
When the pressure is released at the surface, the fracturing fluid returns to the well but leaves behind the propping agents to hold open the formation cracks".


**And the annonucment today states that we have a "tight" zone in MeekSands#2.
Meek 1 was treated and is ready for the next step, but Meek 2 has to catch up so as to channel the gas efficiently. So they will fracture it.

Meek 1 is ok at this stage and appears happy to let its gas go at a practical rate, but the Meek2 needs to be opened up further to fully capitalise the well.

So this is in no way negative, it will merely be an acid or hydraulic method used to push the fluids and props through the particular subterrainial layer.

Then...as they said, they will tie in the wells to the main marlket line.


At this popint, may i add, that we are under a turnkey contract for this well and no extra costing would come from us while under the contract, it would be forked out by Hollimon.

After fracking, it is not uncommon for wells to easily flow at rates of MIllions of cubic feet per day, as opposed to just thousands.

So this is a good time to get the cheaper shares if you can appreciate the slightly accelerated upside potential to this well.


Cheers

L