Hi Kip
I agree with Jak in that broker reports are conservative and that this is the calm before the storm
My 2c worth is that T2 and T3 flares prove the commercial success of the project and also prove the success of the fraccing redesign and learning curve fromT1.While flow rates would give a definitive answer and allow earnings forecast I can see that the flares flow enough for commercial success.
The thing I really like about RLE is their timing of getting the project up and running right when gas prices are at such highs
https://www.copyright link/business...task-on-east-coast-gas-prices-20180930-h162ge
In the link above at the end of the article the author talks how gas price could hit $15 aud /gj
, above the accc forecast and if that proves correct which it isnt that far off it right now then
the combination of an extra $5/gj and IF flow rates prove 3mmcf/d or MORE and no short term downward price pressure then I do think the broker report of 40c /share is conservative for T4 to T9 and could quite easily be up in the 50c to 60c range like Jak has said.
Also dont forget how drilling costs have reduced subtantially from 10 million per well to less than 5 million per well even with fraccing.
So the combination of those 3 things really push RLE valuation up and the fact that management just make things happen is reassuring as well
