Ann: Completed Flow Testing ZJS5 , page-4

Now, let me say again.

Each well, if its able to flow (and this license area is nothing like the Sino area based on the now 5 wells drilled in it, this area is VERY TIGHT) and ITS A BIG IF to getting any flow, will only be able to DRAIN a very small area in my view.

CAMAC (who called this correct selling the licenses of for a small amount to LRL imo) estimated that for all the gas in the whole license the MOST recoverable would be 300 BCF IF ANY GAS AT ALL IS RECOVERABLE.

If they are lucky and they get flow, in my opinion, they will be very lucky to get 2 BCF per flowing well. They might only get 1 BCF or 0.5 BCF per flowing well before it dies and flows no more.

This area is VERY VERY TIGHT based on all the wells so far, so even if you frac the penetration of the frac will only get you a very small area in my view which can be drained, much smaller than what Sino are getting in their sweet spots.

To exploit this area based on this VERY LOW PERMEABILITY (no gas flow at all in their test) you might even be looking at having to drill 300 to 400 wells to get out 300 BCF, if its there at all. Could need 1000 wells.

Which I think is why Camac sold this licenses off, based on the results of their 4 wells they realised that the possible return on investment here would be small I think, too tight, needs too many wells, small return if any if you can get flow from fraccing.

Imagine drilling and fraccing 500 wells to get 150 BCF of gas - is it viable ?

Wonder if LRL will go back to looking for Thermal Coal in China or Gold Mining or all the other things they have done/said they would do, and give up on the gas idea after these 3 wells are complete ?