conference, page-31

Hi wobbly

Not really sure but it doesn't look good, oil now under $90 a barrel, US futures down heavily and Europe down heavily - my guess mid 80's, if quantum keep selling we could see .70's soon IMO, absolutely crazy as we were just at $1.18 and moving up. As buffet says - "The Stock Market is designed to transfer money from the Active to the Patient." and "Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it."

A few extracts from Steve antry the CEO of eagle energy talking about the Mississippi lime, drilling in woods and alfalfa county -

- The CEO said Eagle Energy's growth rate has been phenomenal, something like 8000% growth rate in only a couple of years.

- Because the Mississippian wells are so much less expensive to drill, with a cost of less than $7 per barrel, the Balken and the Bone Spring wells aren't as profitable per barrel with their costs of nearly” $13 per barrel."

- Antry explained another bonus for this area is the engineering companies are likely to suggest four wells per sections. “So that will boost drilling 25% just like that.

- "How far does the price of a barrel of oil have to fall before the drilling in this area is not economical? The answer is $55 per barrel in the Mississippian play. Even at $55 that would pay for the investment plus a 10% return."

- After production has dwindled, the firm can go back and re-frack that well. “For a $400,000 investment, we can add $10 million more value to that well,” he said as he smiled.

- -Antry said, “When you go further east, say to Osage County, the formations are much more structured and you have to do some 'actual geology.' While you will get some good wells out there, you will also hit some losers.”

What he is saying is that these counties have more geological risk attached to them. Most of RFE's acreage is further east, as i mentioned before the Abunda frac was cut short, most probably because of mechanical issues, i don't think the well is a duster but it could be producing very low production number's. So instead of releasing the number's and spooking the market they are drilling and fracing in noble county a bit further west, so they can hopefully release some decent production number's from here along with the Abunda numbers.

Some good thing's to take out of the though -

- Well down spacing
- Re-frac with minimal CAPEX for a massive return
- Low costs, $7 per bbl
- "8000% growth rate in only a couple of years." eagle currently have 52 wells drilled and 4 rigs operating (adding another 2), RFE currently at the beginning of growth.