benny
"As John says in this broadcast the elephant in the room is the well spacing...he doesn't mention when they will be doing this though, I guess after they have completed the 60 wells they need to drill for this year."
AUT has produced so much material over the last month that it's difficult to see the wood for the trees.
However, if you look at slide 18 of the presentation released 2 May 2011, you will see reference to the tighter spacing and the statement that "Testing to commence to determine efficient drainage / spacing and impact of zipper fracs (simultaneous stimulation of adjacent wells)"
I read that as saying NOW - they are experimenting both with HiWay fraccing and with closer spacing now in preparation for full field development post HBP (drilling to Hold By Production).
That is possibly why they have made such a song and dance about saying that they are ahead of schedule for drilling to HBP. They have some slack to start the planning to optimise field development and resource recovery.
Whether or not NSAI can be persuaded to book or reflect the results of this experimentation in their reserves report later in the year, we should get some feedback through brokers' notes and company presentations. Furthermore, the schematic pictures of possible arrangements for drilling and fracture stimulation suggests that they will be tapping the overlying Austin Chalk (which must be within the 350ft of pay zone shown), and those reserves have not been counted yet.
So, I will certainly be holding on tight to the shares that I have because the next 12 months or so could see a further step re-rating.
"As John says in this broadcast the elephant in the room is the well spacing...he doesn't mention when they will be doing this though, I guess after they have completed the 60 wells they need to drill for this year."
AUT has produced so much material over the last month that it's difficult to see the wood for the trees.
However, if you look at slide 18 of the presentation released 2 May 2011, you will see reference to the tighter spacing and the statement that "Testing to commence to determine efficient drainage / spacing and impact of zipper fracs (simultaneous stimulation of adjacent wells)"
I read that as saying NOW - they are experimenting both with HiWay fraccing and with closer spacing now in preparation for full field development post HBP (drilling to Hold By Production).
That is possibly why they have made such a song and dance about saying that they are ahead of schedule for drilling to HBP. They have some slack to start the planning to optimise field development and resource recovery.
Whether or not NSAI can be persuaded to book or reflect the results of this experimentation in their reserves report later in the year, we should get some feedback through brokers' notes and company presentations. Furthermore, the schematic pictures of possible arrangements for drilling and fracture stimulation suggests that they will be tapping the overlying Austin Chalk (which must be within the 350ft of pay zone shown), and those reserves have not been counted yet.
So, I will certainly be holding on tight to the shares that I have because the next 12 months or so could see a further step re-rating.
