counting chickens before they hatch

When it comes to the potential for hydrocarbons contained within current and future drilling prospects, comments regarding stocks on other threads seem to have the glass running over (forget half full / half empty).

No mention is made nor consideration given to whether the structures may be for example: tight, or if shallow, then could be bio-degraded and water flushed or that the gas (if present) may not be the gas that you want (eg high carbon dioxide levels).

I have even read comments that refer to the proceeds from share placements as Cash Flow.

For my part, when it comes to ARC its good to see that their cash flow comes from Oil and Gas sales and not from running the printing press flat out.

Critical scrutiny is one thing, but when it comes to ARC, emphasis seems to be placed on not what she could have, but more so on what she probably does not have. Using the glass almost empty approach in these times is perhaps prudent, however, how prudent should analysis be?

Do you savagely discount the value of current producing assets and their associated revenue, as well as totally ignore any of the upside in those assets? Further to that, there appears to be no consideration given to the theoretical blue sky in their other prospects with in the Bass or Canning Basins.

ARC’s prospects in the Canning, in theory, and theory is what all hydrocarbon prospects are until the rotary lie detector proves otherwise are for want of a better word/phrase, hard to fathom.

What they contain is a mystery and will remain that way until definitive testing. And I’m not just talking about the wells that are currently suspended, pending further evaluation.

For example, while ARC may have absolutely no intention of pursuing this old gas discovery it does however have plenty of other large structures that it will be testing.

Here are the details of an old well on a very large structure that is situated in SPA 7/05-6 AO

St George Range - 1
Drilled in 1966
DST - 2 (3,154m)
Gas flowed to surface at the rate of 2.9 million cubic meters per day
Areal Closure 919.0 sq km
Vertical Closure 914.0 meters
Porosity < 3%

Remember that’s cubic meters not cubic feet which makes the flow rate approx 23.8 times the rate of Point Torment which flowed at 121,760 cubic meters per day. Porosity is nothing to write home about but all the same that’s not a bad flow rate

What’s in it, who knows!!!. As gas was not what they were looking for some forty odd years ago it was probably ignored and eventually forgotten . Did anybody know or care what the break down of the gases in this discovery were? Probably not.

The point here is how did ARC convince Alcoa to part with its $$$ (not that its high risk as they can supply gas from else where) and how do you justify a pre-feasibility study for the so called Great Northern Pipeline unless you already have a reasonable idea of what the potential is in the leases and SPA’s that they currently hold or joint venture.

Oil is not the be all and end all of hydrocarbon production. If you have enough gas there’s plenty of $$$ to be made if it can be liquefied or sold directly into a hungry gas market.

ARC has approximately 10 wells scheduled for drilling/testing that in theory could tbe completed between now and the completion of a Take-Over (that’s if an offer was made tomorrow) so hopefully she will get her chance to deliver before that happens.