With the 3.5mn well cost, I am simply going by what they...

With the 3.5mn well cost, I am simply going by what they published in one of their presentations from last June - http://www.asx.com.au/asxpdf/20140604/pdf/42q0nkntrgzvgk.pdf (Page 8).

Even allowing for 10-20% adjustment to the well cost after design changes leading up to final design, one would think the slack in demand for drilling services created by the plunging oil price would offset that.  I have read rig cost dropping as much as 70% in some cases.  That discount mightn't apply here to the same extent here just yet due to limited cutbacks in planned capex and rig availability.  But this will start to bite soon enough - eg. Santos' plan to cut CB rig from 7 to 5 - http://www.businessspectator.com.au/news/2015/1/14/resources-and-energy/santos-weighs-pipeline-sale

So if we can make full use of the expected drop in rig utilisation rate over the next 6-12 months, and be able to reach FID some time this year to sign up firm rigs for development drilling while rig costs are slightly depressed, it will definitely be helpful - at least for phase 1 project economics anyway.

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