q & a time

Question:
Congratulations on the latest announcement regarding PEL 218 resources. How soon do you think ADE can convert these volumes to reserves?

Also, if I calculate correctly, the 2tcf over 200km2 is equal to 26bcf/sq kms, which is quite low? How do you see this?

Also, the recent qtr report showed a low level of funds in the bank, and while the asset sale of the gas storage project was touted, which could help cash reserves, I am concerned that another capital raising is imminent. Can you make any comment on this?

Answer:
Reserves bookings require commerciality tests to be passed ? including gas market (with different views on how firm marketing arrangements need to be), commercial flow rates, etc. The 2011/12 program will address the latter (e.g. through horizontal wells) whilst Beach (as Operator) is also very active on the marketing front. I think we should see an initial reserves booking in this current fiscal year ? but there are a few moving parts.

Beach has been conservative on a number of fronts in the initial 2C booking ? see their announcement. They have used a recovery factor of the gas in place which is quite low (at this stage, given where we are at). The GIP is many times the 2C figure.

Beach has approached the booking in a technically rigorous manner. The number will be respected in the industry (unlike, e.g. some of the CSG explorers?.).

With respect to our current balance sheet position ? we have a number of options which are under imminent consideration. You may see something later today or on Monday, which we think will be welcomed.