re: Ann: AusTex Oil Announces $3.2m Placement... Dis,I took your...

re: Ann: AusTex Oil Announces $3.2m Placement... Dis,

I took your comments on board and checked my numbers with a Pro. I certainly would not want to post anything which was factually incorrect and apologise if I did. The following will clarify costs etc:

* Typically the $3m drill & complete Authorisation for Expenditures (AFE) for a horizontal Mississippi includes an amount allocated to SWD well - you are correct here.

* A good Salt Water Disposal Well (SWD costs about $1.4m to drill, permit and commission and a single one of these will support say 10 horizontal Miss producers.

So ~140k of the $3m AFE is for a share of SWD well.
In practice you really have to drill the SWD well and lay pipeline to it before you drill your producer (unless you want to truck water to someone else's disposal well and pay them per bbl amount for trucking and disposal).

* So to kick off a single well deal – you would need to spend a min. of say $5m (Horizontal well plus SWD well plus infrastructure). This obviously represents 100% of the expenditure - so reduce pro-rata if you bring in a partner.