What is it really worth?, page-143

MM

You may be correct in that calculation, but it is missing some key deductions. Reserves are salable product, so you will need to deduct the gas which will be used in the physical process at Leigh Creek. I am not sure how large that number will be, but in most conventional gas operations I have worked on, fuel gas is generally about 6-8%. In this case, I think the number will be larger as there is quiet a process to get syngas to sales gas, if that is the sales route they are achieving. This fuel gas is the gas used in the process, including that gas used for power generation on site, i.e. just to keep the lights on and the air cons working.

Now in some cases that power can come from the grid, and that may be the case here, but you are then just assuming a higher cost base for the operation. The classic economic conundrum.

This has been one of the reasons that I have always looked at a relatively low number for gas reserves (best est 1,600 PJ) from the current resource base.

And just to be clear, I don't expect 100% of the ultimate 2P reserves to be calculated now, as I would expect a conservative number from MHA in this case.

GLTAH

AL