It would seem that BPT and ADE are being ultra conservative when they talk about recovery factors of 10-15% (I know they didn't actually say this is what they would get, I think it was more like "even if we only get"). According to the U.S. Energy Information Administration an average recovery rate is more like 25%. They state in their report on shale gas, that recovery rates range from 30% for favourable gas recovery to 20% for less favourable recovery. A recovery factor of 15% is only applied in exceptional cases of severe under-pressure and reservoir complexity, whereas a recovery rate of up to 35% can be applied in exceptional cases with established high rates of well performance. So like TME I eagerly await results of GIP and ultimately recoverable. Assuming even an average recovery rate of 25% and GIP of up to 130 TCF? (I read that somewhere), we would have around 3.25 TCF net to ADE. If you make the same assumptions for ATP855 it is not inconceivable that ADE could be sitting on up to 10 TCF net of recoverable gas (pretty unbelievable considering current market cap). Thats not to mention our other prospects.
ADE Price at posting:
14.0¢ Sentiment: Buy Disclosure: Held
