Maths may be correct but think that unconventional reserve estimates are a bit tricky - if you want to really know p1 and p2 volumes then you need to know the area the wells can draw. 1 billion in reserves from 100 wells at 10mm U.S. Oex share per well - 1 billion capex and negative npv. The question is can we tap those reserves with only 20-40 wells?
On the plus side if all the U.S. Shale unconventional wells perform like oex Cambay wells the oil price will be back at 100us/Stb in no time!
I think the big money will only come with 2 - 3mmscf / day initial rate staying above 1 mm scf / day for some time and high liquids proven consistently across field.
That's what the next drill is about. Imo that's why the price is low - it's still a bit of a punt. We need to see if oex can drill and complete its way into the money. Still hoping to pick up shares at the capital raising from disillusioned holders!
What excites me is the intention to drill - supported by indian gas market holding up- when the other companies are sitting around waiting for the oil price to rise. Lock in a cheap rig and cheaper fracing spread ang get production happening!
OEX Price at posting:
7.5¢ Sentiment: Buy Disclosure: Not Held
