On the “discovery” front, they are technically correct. Until we...

On the “discovery” front, they are technically correct. Until we can get it to flow in a viable manner, it is not considered a discovered reserve (proven or contingent). So we remain in the pre-discovery, exploration mode, rather than the post-discovery appraisal mode (wrt HRZ).

Page 9 of the recent AGM Investor Presentation is a great reference point for the HRZ quandary we are now in. In the ideal scenario a good flow rate at IW2 would have established the discovery, and subsequent wells in the HRZ, including the first horizontal, would have been part of the appraisal process. The difference in farmout terms between exploration and appraisal would be quite marked. Similar to the difference between angel round funding and later VC round funding in the case of a start-up. The great unknown for us punters, is how much the knowledge gained from the efforts to flow 2V can be parlayed into a farmout funding exercise that considers the next well as being more appraisal than exploration. The article referenced by Spiney does make this point, which I think is quite pertinent.

That said, Dave appears confident that we have generated insights sufficient to bridge that gap. Time will tell. Meanwhile conventional prospects are at worst, a source of funding to counter balance any extortionate terms for HRZ farmout....and at best, a significant value creation lever for shareholders.

All IMO. GLTA.