Total well cost will be far in excess of 3.5M IMO. That's about...

Total well cost will be far in excess of 3.5M IMO. That's about the current cost in Qld CSG for Walloons production wells drilled to 600m and not fracced - check ORG's recent presentations on APLNG.

The actual drilling cost is not much, but it's tying it in to the gathering system that adds cost. I believe current Cooper Basin development well cost is about $7M. STX's wells aren't as deep so realistically probably looking at a figure somewhere between the two.

On the other hand, if saturation really is 90% and permeability is anything above about 2mD, they will get decently more than 4 bcf per well.

Hardcash,

100 Mscfd is nowhere near economic for these wells. It's not even economic in Qld. But these wells don't really need to make economic rates, because there is time to optimise the process later. They do need to produce meaningful gas rates though to justify taking it to the next stage. 100 Mscfd could be enough to justify pursuing laterals, especially with these lower water rates.

You will hear in the industry that the rule of thumb is that a lateral will give you triple the production of an equivalent vertical, but I personally have found much more than that in CSG. Five times, even eight times. I think this is because gas rate in CSG is dependent on dewatering and laterals allow very effective dewatering of the reservoir.

You can add fraccing to the mix too (like a US shale well) if you want but to be honest if they have even 2-5mD here, I don't think they'll need it. Fraccing is not as effective in coal and unfracced laterals are shaping as the winning method, especially with modern drilling techniques that allow very fast pad drilling of laterals that is extremely cost competitive to vertical drilling.

Anyway, that's getting a bit ahead of ourselves. We need to see that flare grow significantly by next update - if it doesn't, we have something going wrong. You can't keep pumping that much water out of a CSG reservoir that's 90% saturated and not get significant gas flows!