Ann: TTE US Update & Reserve Clarification , page-22

Hi Desmin,
I'm not an accountant so i'm not sure why they don't account for an assets value in their accounts - perhaps there's too much conjecture as to what its worth or simply they have to account for the value as costs incurred to date or book value. Not sure.

TTE's Chairman has previously stated that the market should now recognise the considerable value of their holdings in the Perth Basin - following the reserve estimate released by AWE - why this considerable value isn't recognised in the accounts i can't say though clearly the value is far greater than that reported. Perhaps it is recognised when reserves are 1P?

As for a Farmout, my view was that you need to leave something on the table for a incoming party - particularly where costs need to be spent to prove up the reserve etc and we are dealing with a junior company without much leverage as the big boys.

1P (Proven) reserves are worth approximately $50 - $60 per barrell and 2P in the order of US$20 per barrel (as a rule of thumb). This is from an expert in the industry that works on M&A activity on a daily basis as a profession.

Lets hope we see a well spud prior to end of month..