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Whilst price action like this generally makes me very nervous,...

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mandurah

893 Posts.

9

12/08/14

17:34

Post #: 13806772
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Originally posted by mandurah ↑

Great post Chill re 77H concept well. I suppose with the recent weakness in price and a delay in clean
up, the outlook turns to nervous negativity. There can obviously be only 3 outcomes.

1. The well is not commercial. A bad post clean up flow test where the initial recovery of 100bbls of
oil a day has petered out to a trickle. Them thar rocks just don't have the quantity. 2000m laterals
would not alter this sad outcome. My personal opinion ; Whilst possible, I would bet against this
outcome based on previous observations.

2. The well is marginally commercial or just under. This would be an acceptable outcome based on
the fraccing plan implemented and the 4 frac stages over a 350m lateral. If the well turns out to be
predominately wet v dry then a markedly different mix of proppant and fluids would be used in the
follow up wells. 3 x the lateral and 3 x the frac stages would imo prove up the long term commerciality
of the field if the result is just ok on 77H. Decline rates, composition of fluids recovered etc obviously
critical going forward. Of course, the SP may deteriorate further in the shorter term as it will take at
least 60 day flow rates to determine declines and we will have to raise $ at a discount to where we
are at now. You could say 6-9 months before the next well produces an outcome that would be
definitive if this was the scenario. 350m lateral & 4 frac stages on 77H is miniscule really. So,
whilst a result like this would be anti-climactic it would not be unrealistic. It would give me more
than enough encouragement to continue to hold and re-invest. The options also would still
be in play based on this scenario ; Exp Sep 2015.

3. The post clean up flow rate is exceptional viz a viz the 350m lateral and 4 frac stages only.
If this was the outcome then the Cambay would imo be well and truly in the league of the EFS.

Realistically hoping for 2 & 3.

GLTAH

Expand

Whilst price action like this generally makes me very nervous, at this stage I contend that it is
because of the delay in clean up and rightly or wrongly, the lack of information regarding
additional flow rates and info post the 21/7 ann.

I did not notice any appreciable SP increase prior to the 21/7 ann which thereafter resulted in
a 60% increase in the SP. Contrary to any other evidence, I remain of the view that 77H is a
"tight ship"

GLTAH

OEX Price at posting: 16.0¢ Sentiment: Hold Disclosure: Held
5 Upvote

0 Great analysis

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Whilst price action like this generally makes me very nervous,...

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