santos' catch-22, page-9

High flows rates + wide spacings + stacked multi-laterals = industry lowest cost per unit of gas.

You get more gas out of the ground, at less cost, than the verticals in QLD.

This is not really true IMO... the main reason they aren't using stacked multilaterals in Qld is because they don't need to. A vertical development well is maybe $1M to drill, and takes three days. A stacked multi is more like $5M, takes three weeks if everything goes well, and has a much higher risk of failure.

And the only areas that are in development drilling at the moment are high-perm fields like Spring Gully, Fairview, Talinga, etc - hence the use of cheap and simple verticals. You can bet that once they start moving away from the sweet spots, they will start drilling stacked multilaterals in the Bowen too (for STO that means Fairview, Arcadia, Comet Ridge, maybe Scotia). They won't in the Walloons because the coal seams are too irregular there so it will be vertical fracs. But STO doesn't really have much in the Walloons anyway.

My understanding is that ESG are hoping for 3-4MMscfd from their stacked multi pilots. Vertical wells in Fairview can produce up to 2MMscfd and some single laterals in Fairview are apparently going to produce 15MMscfd, which is absolutely insane. So stacked multis may be the lowest cost per unit gas for a given piece of coal, particularly if it's low perm, but there are verticals in Qld that are FAR cheaper in the sweet spots, purely because you can punch out 5 wells flowing 1-2MMscfd each for the time and cost it takes to drill 1 stacked multi flowing 3-4MM in ESG's area.

Just wanted to point that out in the interest of a balanced debate. :) The biggest advantage of ESG's acreage IMO is the sheer size of it. That should justify a pipeline to Roma or Dalby and then into the GLNG feed.