T3 dewatering & production test timekline, page-2

ADL,

I had a good chat with RLE yesterday. I would expect flow rate testing to begin early next month. That means running a production string into both wells and conduction flow testing. Flow tests will be done back-to-back while equipment is on site and flow rates reported one after the other (starting with T3).

At this stage no 'red flags' have been noted and no significant amount of water is expected to be recovered. At T3 & T2 the expectation is that frac fluids are recovered and gas flows follow immediately. The frac design was conducted to prevent water production so no long de-watering timeframe is expected (i.e. coal seam gas wells).

Everything has gone according to plan thus far, so my expectation is early next month for flow rate announcements.

For perspective, T1 was a vertical well that unfortunately when fracced resulted in water inrush. On testing, that well flowed around 2mmscfd and continues to do so (see recent ANN). T2 & t3 were drilled to maximise flow rates and not encounter water. Therefore its very reasonable to expect flows >2mmscfd. RLE's expert is predicting ~3mmscfd. If we get anything near that i'll be celebrating with some expensive rum!