Hi Spec, I agree - it's good to see an update on this option but...

Hi Spec,

I agree - it's good to see an update on this option but at the same time, there were few details on the sensitivities used. We are all confident it shouldn't ordinarily be like this but when i analysed the weather patterns below, it looks like a couple weeks could be the norm? I'd hope not, but for me that would be enough to do this pipeline. Some detail that I'd love to know would be (but never will for many!):

- Total cost estimates for pipeline to highway and roadside facilities for land, oil storage, offload equipment and other infrastructure (security fencing etc). Are we talking $10m? $15m? $20m?
- Transport costs currently incurred using access road and savings through pipeline. I've previously stated that these should be significant and on an NPV basis should pay for a significant amount of the infrastructure in their own right.
- Assumptions on access road non-utilisation due to wet season / rainfall. How many days outages are they expecting in any given year going forward? What stranded costs are they left with everytime we are rained in?
- What discount / loan rate were they using? Once reserves are certified, will they re-visit the scenario with RB facility and what funding rate are they expecting?
- Production rates assumed. If management are confident of hitting 5,000 bopd from the Ungani field it strengthens the case further due to greater transport savings. I assume they'd be confident on probably double this with success along the Ungani trend; it has previously been stated that Ungani could become the central processing field to tie in new discoveries.

Other points - very important IMO:
- De-risking cashflow considerations. As any investor knows, lower risked cashflows are worth more than risky cashflows. A pipeline operation would significantly reduce cashflow risk and hence the valuation of the Ungani field would increase. Are they considering this for their business as a whole for us shareholders?


Overall, I'm a little confused when Strachan, who has access to management (and management publish his reports to the website), has been hinting that a pipeline is the forward-plan. Perhaps it still is but would like to wait until results of further wells on the Ungani-trend come in and an improved capital position....

Quarterly wet season commentary and weather data
I've also done an historical review of the commentary from some historical quarterly reports and for completeness, inserted some weather data from Broome airport weather station. Although it's not Ungani weather data, it provides good indication of the weather patterns around the area and is at least accurate. In summary, when Ungani has producing, we have been shut in pretty much every year (2013, 2014, 2018). Other years we have been planned shut down so its difficult to know if it would affect us (2015 - end of EPT in early Feb, 2016 and 2017 low oil prices). 2015, 2016 and 2017 years all had higher monthly and daily rainfall than in 2013 when cross referencing to the weather data........will leave it to people to make their own assessment. Are we looking like this will occur a couple weeks a year, every year?

2013 March quarterly
"Oil production was curtailed several times during the quarter due to transport and weather limitations"

2014 March quarterly
"Despite heavy seasonal rainfall in the Ungani area during the wet season, the EPT continued to perform well with 48,400 barrels of oil produced during the quarter. As planned, there were periods during which the wet weather necessitated the closure of roads for safety and operational reasons and these closures restricted production during January and February. However, rainfall was significantly lower in March, leading to good access track availability."

2015 March quarterly
"Ungani test program – The data acquisition program under the Extended Production Test (“EPT”) for the Ungani wells was completed. 16,475 barrels of oil were produced during the quarter prior to the field being shut in on 8 February 2015 in preparation for the upgrade works."

2016 March quarterly
"Ungani Oilfield Production from the Ungani Oilfield which commenced in July 2015 continued until 28 January 2016 when production was suspended. The oil price had deteriorated from some US$65 per barrel when production commenced to some US$35 per barrel when the field was shutin due to unsustainable operating cashflow returns."

2017 March quarterly
"Planned restart mid-year"

2018 March quarterly
"Production was shut in for all but 6 days during the quarter" (Bruce's commentary - feel free to borrow Eric )

Hopefully this table pastes ok below - source: Weather data for Broome airport

	Column 1	Column 2	Column 3	Column 4	Column 5	Column 6	Column 7	Column 8	Column 9	Column 10	Column 11	Column 12	Column 13	Column 14	Column 15
0	Statistics	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec	Annual	Years
1	Rainfall
2	Mean rainfall (mm)	191.5	183	100	25.8	27.2	18.9	6.8	2.2	1.4	1.4	9.1	63.3	615.5	77
3	Mean number of days of rain ≥ 1 mm	9.2	9.2	6.3	1.9	1.7	1.2	0.5	0.3	0.2	0.3	0.8	3.9	35.5	78
4	Mean rainfall (mm) for years 1981 to 2010	190.6	201.3	110.1	27.6	15.7	14.6	9.5	1.5	1	0.6	9.9	76	658.5	30
5
6	Total monthly
7	2013	115	259	20.4	10.2	119	187.2		0.6	0.8	9	37.2	204.2	962.6
8	2014	384.2	168.4	32.2	33	9.8		4	0.2	2.8		10	65.4	710
9	2015	193	117	53.2	25	0.2			1			6.4	30.2	426
10	2016	142.8	48.8	11.4	0.4	93	5.6		46.8		0.6	0.4	435.6	785.4
11	2017	227.8	198.6	179.6	19.6	0.4	0.4	0.2	0.2	1.4	1	9.8	143.8	782.8
12	2018	945.4	614
13
14	Highest daily
15	2013	39.8	50.2	7.4	7	55.2	146.4		0.2	0.2	8.6	28.8	96.4	440.2
16	2014	171	64.6	17.4	32.2	9.8		4	0.2	0.4		6.2	45.4	351.2
17	2015	43.4	76.6	21.2	12.4	0.2			0.2			6.4	30	190.4
18	2016	71.4	33.6	7.2	0.4	38.4	5.6		26.2		0.4	0.4	247	430.6
19	2017	65.4	46.6	134.6	14.6	0.2	0.4	0.2	0.2	0.4	1	9.8	94.4	367.8
20	2018	439.4	376.8