ann, page-50

Ok, what have we got.....

SOA #2...very happy that where past the sticky shale / salt layer. Those traps know were comin. Terry mentioned that the well bore has been extensively conditioned. This is critical because water in the drilling mud infiltrates the crystalline structure of the shale causing it to weaken, deteriorate and disintegrate. That's why we used oil mud that does not contain water. Notice also how much difference it makes using good equipment and crew. I'm sure TB has made note.


DEFENDER...Nothing wrong here. Get the Jet pump sorted and she'll be sweet. There are 56 potential drilling locations in Hawk Springs and this is the 1st. The absolute most important thing is that the oil is there and we are learning plenty from this as we go forward.



GRETEL II / ABERCROMBIE...alacrity nailed it so I'll repeat it here...

"the positive is abercombie, who's bottom hole is only 1mile from our land has produced 380-680bopd proving our land should also produce close to this using a simillar length lateral and no doubt our 0.75% interest will gvie us acess to that info and perhaps a JV ?"



AUSTRALIA II...gas....I love gas in oil wells. Terry mentioned killing the well because he knows how big a deal it is. Not so much because of big oil numbers but more because it tells him our leases are " cooked " as osi said a couple of weeks ago. Multiply that by other formations lower down and the potential in Fort Peck is looking more promising with every passing announcement.



The only other thing to comment on is the time it's taking to get the production infrastructure in place. It's a non event in my opinion. We are not the only company wanting this stuff. The Bakken is going ballistic and there is a huge demand for this equipment. In time our organisation and forward planning will improve. Just be thankful we need it in the first place, what do ya reckon.




OMR