A few days ago I emailed DW to clarify some points in the last...

A few days ago I emailed DW to clarify some points in the last announcement. One of those points was to do with this much anticipated "Super Highway" announcement. Another clarifying the intent of the conventional performance comment, below is an extract.

4. “Results from permeability tests on the “Super Highway” zones are expected within days”
· Will these results be announced to market? DW: We will announce the results in some way yes.

5. “our view of the nature of the HRZ play, based on these characteristics, is pushing the needle towards a possible production profile that is more akin to conventional reservoir performance”
· Is this conventional like performance statement indicating that flow decline may me like conventional or is it aimed more at flow rates? Additionally with conventional type performance is it thought that the well completion methods will be closer to conventional eg. Reduced fracking requirements? DW: Higher initial production, lower decline is the possibility – still needs fracking.

"in some way yes"

I'm thinking based on this that the announcement is likely to be more than just results of the stated Super Highway zones and that we could perhaps be reading about the entire field structure within the next announcement.

I and others have done some significant digging into past well records and there is actually a lot more information available than many would think when it comes to estimating the resource. Bush federal 1, Nora federal 1, Susie 1, Wolfbutton and most recently Icewine 1 are all pieces of this puzzle that allow us to estimate the HRZ and Shublik pay zone depths, Thermal maturity, TOC's, porosities etc. A lot of the info is dated and hard to decipher but I think that between those wells and Icewine that PB and team will already be in quite a firm position to indicate resource. Judging on what I have read to date that resource will cover almost the entire 88E acreage other than a thin sliver on the southern boundary that will likely be higher in gas than liquids.

The confirmation about the possibility of conventional type initial flow rates is also very interesting as we all know that conventional flows harder and for longer than shale. Even if we simply flow at the higher end of shale production profiles the development hence breakeven price will be greatly reduced. If we manage to flow at rates midway between conventional and unconventional I have very little doubt that we will be able to achieve a breakeven price which makes this project economic at todays oil price.



Conventional has a far slower decline rate than that of unconventional as well as producing higher initial flow rates.

There remains a risk that impatient holders will continue to seel because we have now had nearly 2 weeks without news however I think most will be burnt in the next few days when the announcements begin to flow. The next one is certainly shaping up to more than a simple porosity update  IMO.