There's been lots of hype and lots of pessimism, with much of the pessimism popping up due to delays more than any changes in geological interpretation of results and clearly only proof lies in testing only, but the following appears to be quite a strong case for a potential discovery:
Structure:
1/ 8sq kms has been mentioned generally, with EGO suggesting up to 17 sq kms 2/ Gas flowed downdip within closure, so why would you expect water updip? Only if a separate unconnected compartment (undetected fault) 3/ Rich underlying source limits migration risk 4/Good top seal 5/Dependent on fault seal in one direction, but if not separate compartment to Pt Torment, then this may already be proven
Indications while drilling:
1/ 10% gas at one point - this is a clear direct indicator 2/Pressure gradient suggestive of gas (ala EMR)- fair comment, standard measure and means of interpreting fluids, and fluid boundaries 3/ EGO suddenly bought back in - probably as a result of points 1 and 2 above and the presence of vugs
Size
1/ At 8 sq kms and reservoir penetrated to date, this is sizeable with normal porosity 2/ The vugs would increase pore space volume dramatically 3/ EMR suggested potential gas volumes in the Valentine range. While some posters correctly point out that there is sometimes hype during AGMs according to a knowledgeable person present there was very little hype in their discussions (maybe Swatch could comment on this as he was there). It also matches with the areal closure and vugs quite well, so does not seem an overstatement 4/ They have oil in Anderson, but are excited by the Nullara! Why would that be?
Upside:
Oil downdip or at depth Over 100 linear kms of this formation in Arc tenements Vugs here and at Blina Oil in Blina and Oil and Gas at Pt Torment, so areal distribution is exciting
Still, it's a funny business and could still be water, and possibly I have missed some things or made mistakes, but it appears a compelling case for optimism rather than pessimism. Just hope the wet doesn't delay the testing until the dry, but I have no trouble holding my Arc shares for a long while yet given what else is coming up for them anyway
ARQ Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
