placing: fools or thieves ?, page-11

Morefish, your kind of right, kind of wrong.

Look back at the March presentation, it states on P18 the below:

"?Current AFE for drilling & testing cost ~ US$27 MM, Jacka net ~ US$8 MM (~$3.5MM paid to date)"

They would have been given this by the operator Cooper and certainly were able to cover this with their cash reserves at the time so no need to raise oney. Note, that this also states "testing" though it doesn't state if this would be a production test, but even if it didn't, they were always going to be able to cover the $27m plus the additional $10m of the gross cost. JKA hav had very little to do with the drilling, this has been Cooper and Dragon who have been in control and therefore, JKA have very little impact on well timing and this has been a VERY long well.

You've also been a little harsh on the directors.

Richard Aden – Executive Director
?20+ years oil and gas experience in a variety of senior executive positions worldwide
?Ex-Hardman Resources, Enterprise Oil
?Extensive experience in operational and capital management, project evaluation and commercial screening, M&A

Stephen Brockhurst – Non-Executive Director
?Significant capital markets, corporate advisory and company secretarial experience, ASX and ASIC compliance requirements
?Responsible for IPOs and equity capital raising in excess of A$200 million

It states for Stephen Brockhurst "AND" company secretarial, which means he has also worked specifically on capital raisings and corporate advisory work so yes they do have experience here.

At the time of the presentation, the SP was 19c and there was no impending requirement for cash. so why raise at that time, when there is a value trigger coming up (fully funded at that stage). They were expecting at that time, to complete drilling of HW3 (hopefully successful) and be able to raise cash for Aje at higher than 19c and therefore protecting shareholder value.

I've just read through the announcements and none of the initial announcements stated anything about being fully funded as you have stated.

The first indication that we have of a change to the drilling cost is on 22nd May (SP closed at 10.5c) and the statement was:

"The well cost and forward program is under review by the operator and the joint venture and an update will
be provided once this is complete. On the basis of all information to date Jacka remains fully funded for both
the drilling and testing of this well."

We then had an update on 5th June with the statement below:

"The cost to complete the drilling program is estimated to be $44.8 million, with a total duration of 100 days,
exclusive of testing. Estimated cost to date is approximately $31.6 million and 67 days have passed since the rig arrived on location on March 28. The Company currently has ample cash reserves sufficient to fund its
proportion of the estimated well costs."

Note that earlier in this release they state:

"A decision on testing will follow the drilling of the horizontal wellbore."

So you could safely assume that the new well cost was excluding testing. SP on 4th June was 8.5c.

So essentially, the first time JKA were probably told by the operator (Cooper) of the change to the drilling cost was around the atart of June so would you rather have had a cap raising then when the SP was 8.5c (without any discount - and they probably would have wanted 25% looking at the risk that still existed) or now, when they may get 8c including discount.

Like it or not, they need the money to complete drilling and testing, I'd rather they raised now instead of either foregoing a % of the well (and probably the licence) or worse still, losing the licence due to not being able to fund their portion.

I think the BOD have played this ok, they realised they would need funds, sure their terminology of covering well costs was confusing but this would be the only blip on their marker IMO, but they chose to wait until the first fractures were penetrated for hopefully some good news to run the SP up and therefore, try to preserve what value they raised funds at.

Ps - You do realise that the BOD own around 20% of the company and would have lost a darn sight more than you and I (in paper profit likely) than the rest of us, so don't make out that they aren't looking for the best interests of holders.