I have known about the fact that the trial production licence in effect meant domestic sales for at least the last 6 months maybe longer. Although there was the possibility at that time of getting some export sales as well, because the domestic market was meant to be nearing capacity from a refining point of view. However things seem to have changed a little in that regard, as at least one big project has been delayed considerably, which has created free space for now in domestic sales.
However we are getting a very good price for the oil which is a real bonus.
The delays are very frustrating I agree but I don't think there is that much they can do about it, other than wait for the government approvals to be granted.
The delays in doing production testing flow rates etc I do find annoying, they are taking longer and longer to do and are now taking longer than the drilling of a well to organise and complete which is not what I want to see as it just causes more delays before the data is submitted to the government.
Remember the decline rate of these wells is meant to be very small on an annualised basis maybe 5% a year, so they will payback quite quickly especially when they have export sales, but they won't get access to full export sales until they have all the above ground infrastructure in place to cope with it.
There are a few catch 22 or chicken and egg situations that they seem to be dealing with.
LOTM
JPR Price at posting:
54.2¢ Sentiment: Buy Disclosure: Held
