LindoTrue ... we do need to see more detail on permeability and...

Lindo

True ... we do need to see more detail on permeability and gas quality, but ... I think you may be being overly cautious and overlooking a number of prior announcements. or example several drilling reports from the 2008 core hole program have said "good permeability" was observed (all the core holes did testing of permeability). And this quote from the reserves upgrade announcement in january 2008 is clear. That is, even what is stated as 3P was a year ago (before this years core holes) considered "commercially recoverable", and results had "demonstrated the continuity and quality of the targeted gas bearing coals".

So I expect from this that reserves to date are based on good quality gas with good permeabilty that is commercially producible!!

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From reserves announcement january 2008:

The gas reserves figures, which have been independently certified by Netherland, Sewell & Associates, Inc, confirm that ESG is on track with its reserves certification programme to establish adequate reserves to meet projected commitments under the Company’s MoU’s with both Macquarie Generation (up to 500 PJ) and Babcock & Brown (up to 40 PJ/a).
David Casey, Managing Director of ESG, said: “The increase in certified gas reserves has been achieved following assessment of initial results from the corehole drilling programme that commenced during 2007. Data from the corehole programme have demonstrated the continuity and quality of the targeted gas bearing coals and, in turn, have allowed extrapolation of test results from the Bohena and Bibblewindi production pilots.”
“Given recent changes to the industry standard Society of Petroleum Engineers’ Petroleum Resource Management System guidelines we are very pleased with today’s certification of 1,300 PJ of 3P gas reserves. Under the revised guidelines the 3P certification is especially significant since it represents gas reserves that are known to exist, are commercially recoverable and, importantly, for which there is a likely market within the next five years.”
The reserves upgrade announced today takes into account data from production pilots within PEL 238 and the six well corehole programme drilled during 2007. ESG is confident of achieving further increases in gas reserves during 2008 as additional data comes available from both the existing production pilots and ongoing exploration activity.

H