Ann: Investor Roadshow Presentation, page-132

The guy also calculates the scenarios for the time to peak production for the Eagle Ford shale. That is when no matter how many more holes you drill you still end up with decline from the field. He's looked at company drill patterns and found that wells drilled at less than 650feet apart become uncommercial. From those numbers he proposed two development scenarios, one based on drilling out the entire play to a final well spacing of 90acres/well, the other to 60acres/well.

In the 90 acre case there are 4.5 years before we reach decline and in the 60 acre case there are 7.3 years before ramp down and that was published in October 2103. So by his calculations even if they drill at full speed the Eagle Ford will probably start to decline sometime in 2018.

He claims the idea of US energy independence through shale drilling is a complete myth perpetuated by the stock peddlers and I totally agree. No wonder the US is today busy bombing Houthis in the oil province of Marib in Yemen. It's about protecting Exxon mobile's business over there. That peddling and debt bubble is also very dangerous for all markets if it comes down hard. Imagine a full Glencore insolvency times 2 or 3. If the shale junk bonds collapse it will take out many ETF investors and could spill right across other junk bond markets. This is one of the biggest dangers sitting out their at the moment for our markets IMO. Subprime take two. Let's hope it doesn't reach that point and melts down in a more controlled way so we can all make money from our Cooper Basin investments.

Eshmun