Dollar, if T-1 does not improve beyond where it is is should at least be a contributing well to sales if T-2/3 are commercial. If RLE can drain the water then T-2 might achieve 2mmcfd initial flow in which case it would be a more useful contributor. 2-3mmcfd is seen as an acceptable result for the new wells, but higher is of course even better. The company has been using an average of 2mmcfd per well for the 9 well programme.
Regarding conversion of resource to reserves my understanding from SB is that they will complete all 3 wells before getting the independent assessment of reserves. What that means for timing is a guess on my part but hopefully last quarter 2018. That will depend how quickly the frac programme gets into operation and the time taken to dewater.
Previously the company has made its own non independent assessment of resources which it may or may not repeat for the conversion to reserves. If so this may happen in Q3.
RLE Price at posting:
9.6¢ Sentiment: Buy Disclosure: Held
