I agree with a lot of what you're saying Rocco...

I get the distinct impression that TLM is using the delay for multiple purposes, not the least of which is playing chicken with the Quebec government. Quebec needs the gas, the jobs, and the royalties that it will generate, and even the PQ knows an independent Quebec needs income streams. The leases are for 10 years at a time right now though, and if Charest wants to get re-elected, he can't go around cutting all those nice public programs. The gas revenues aren't going to come in the next year or two, but they will within 3-4 years. Delays now could mean that the next Quebec government could take all the credit for the NG industry, and he's going to want that to be a Liberal government, not a PQ one. The Liberals need the drilling to continue more than TLM needs to spend money proving up the lowlands. That should be a big shot across the bow of the government to make sure they don't go crazy on royalties. The royalties can be as much a part of cost reducing a well as the efficiency of drilling the well.

From the delay TLM says they will get better drilling rates which makes perfect sense. You can see in their quarterly presentations how much is focused on being the low cost producer of NG and all the metrics they have to measure their progress. They aren't considered cheap without reason... What isn't obvious is that they will end up with 1 year of decline rate data off St. Edouard and 6+ months of data off of Leclercville. They probably tweaked the frac process a bit and understanding the decline rate better is something they need for the long term value of the play. I'm expecting 15-20 mmcf/d IP and 8-10 mmcf/d for the 30 day results from Leclercville and any improvement they identify in the long term decline rate is going to have a direct impact on the NG gas price the play is economical at, not to mention translate into a lot of cash for us.

That new pipeline is going to be filled with just the first pad, and it's going to need extra compressors or expansion by the time the second pad is tied in. This takes time and the extra 6 months is going to give them time to get the pipeline infrastructure in place so the new wells will be producers rather than exploratory wells.

Overall I think this is TLM playing smart, even though we as QEC shareholders will have to wait longer than some of us might want. I'm still looking at this as a 5 year hold and the next 6 months isn't so much a delay but rather part of the normal progression of a new gas play.

Brym