Ann: 2012 AGM Presentation , page-5

I went to the AGM yest. Very upbeat.The two short term catalysts are Canada and Marathon.

1. Marathon. Has 200 bcf and will be producing at 7 times the output by July and a further pipeline is mooted for early next year. The gas/condensate price is around $4 not the NG price of 2.50.This will be good cashflow again and put PSA back into revenue positive. More importantly it is an easy asset to sell.Its value is prob around $25m.

2.Canada.You can never accuse PSA of ramping their stock.At times they need to promote the story better. the Canadian results which were on page 30 of yests address are an example.The details are below:

24.5% WI in 17,280 acres ( net 4,234 acres) of new shale play
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Confirmation well drilled March 2012
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Well cased and suspended. Good oil shows, comprehensive well logs and cores taken for analysis to determine potential of the shale play -results due July.
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Acquisition of further leases anticipated
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Horizontal production well proposed for 4thquarter 2012.



The points to consider is that PSA always said that you could tell Canada was an initial success if they agreed to drill further wells.Everything is subject to jvs etc but it was fairly clear that PSA are happy with the drilling and the shale was clean of mud.The cores hopefully will present an even more positive picture.It is also clear PSA are very happy to keep drilling including a horizontal well.Canada looks good.

If Canada turns out well, as it appears so far, then that is a vg start. They are hoping for 2000 b oil per acre. This would be over 8m barrels on a pv4 basis.

The ultimate aim is 100m b and this will take time and good land banking in the USA.

The other quick point to note is thay have the quality of personel to implement their business plan. This is no 1 in a shale play.Each shale is different even in the same rock so you need experience. They have that both internally and with their jv partners. That was the other crucial take away yest. My fav co on the bourse for risk return.

Mgt have a target of $1.50...sounds great but focus on the cash and Marathon and you easily have 30c with nothing for Canada or the land they are slowly aggregating in USA.Once we get to some enterprise value then the rest will follow.