Ann: Southern Cooper Basin Operations Update, page-53

psi81 - fair point about the water but I come back to the lack of data. They are not telling us if they have been increasing the drawdown over the test e.g. it could be that they have been increasing the drawdown during the test which has counteracted reducing permeability and kept rates up. You might operate a test this way if there was some surface constraint, e.g. maximum amount of water they are able to handle.

Its all just conjecture really. The only thing that is clear to me at this stage is that they need a higher rate than they are currently achieving for it to be economic. It could be they could achieve this out of the current well design, it could be a minor tweak or it could be a substantially different concept e.g. horizontal wells. Just not enough data to say.

Adaltiora - you are right to the extent that there is no point in worrying about anything else if you don't have hydrocarbons, but deliverability is equally important, there are plenty of discovered hydrocarbon pools around the world that have never been developed because rates cannot be engineered to be economic. To that extent permeability is a given in the same way that gas saturation is, i.e. permeability can't be changed. You can work with well completion designs to try and improve deliverability (such as drilling horizontal wells or fraccing) but low permeability is the route of the problem. It would be nice to see some gas rate and drawdown data so we can understand the extent of the improvement required. e.g. it is relatively straight forward to double the production rate, however if it needs to go up 5 times or more that would seem to require a significantly different well design to me and likely markedly higher capex.