Ann: Operations Update , page-17

Chand,

No I don't think so, fairly relaxed about it even being 95% invested here.

I'd put it down to 2 things lack of interest by investors, as so few people seem to know about it, thus the lack of buying even on this pull-back, which has been on light volume and yes if I had free cash I'd be buying more. The series of delays hasn't helped either.

Secondly the last announcement wasn't the best, problems at both J-53 & J-55. So need more news on how these are going to be dealt with going forward. Personally I think they might side-track J-53, as they have never got round the water issue from day 1.

As to J-55, will just have to wait and see if the water cut continues to drop or not. Problem being they only get these 90 day windows for testing then can't do anything again until they are granted a trial production licence for the well. That could be 6 months off. However it would be interesting to see what the water cut is then and how quickly it drops off.

I might be wrong, but there didn't appear to be any water initially from the T2B testing, so it would appear to me the water is coming from somewhere within the T2A. Unlike J-58 which was flowing to surface unaided, from the high pressure within the resevoir, J-55 needed an ESP to get the oil out, just like J-50. So I don't think there is enough pressure or gas lift at J-55 in the T2B to naturally get it to surface.

I'm wondering whether there is more pressure in the T2A resevoir which is forcing the water out more quickly? hence the high initial water cut, until the pressure drops back.

Waiting to see what J-58 does co-mingled, can't help but wonder if the pressure from the intitial T2B zone, is going to initially overpower the flow of oil from the rest of the T2B or the T2A zone, thus the new flowrate number might not increase as much as I'm hoping for.

There again we don't know what size of production tubing there using etc etc either, so that might limit the wells capacity to. Just have to wait for the next announcement.

Quarterly report is less than a week away. Still hoping for 2000+ bopd from J-58.

LOTM