Ann: Jacka Executes Farmout of Odewayne Block , page-21

Hi Kastin,

Thanks for your coverage of the AGM.

Can you perhaps clarify the cash from sale of interest in Somaliland of $10 million.

I thought it was $3 million up front and $12 million upon meeting certain milestones, which I had interpreted to be several years away.

In terms of Tunisia, I suspect that your impression of the adequacy of the rig may well be correct, given the time taken. Also I suspect that the fractures encounted may have exceeded expectations and that they were scrambling to try and control the downhole pressures.

They now have the opportunity to properly engineer the sidetrack.

In terms of financial management I dont believe small E&P companies should be farming in or drilling offshore. Establish prospects and farm down.The risk of cost overruns is too high.

Having said that I suspect that with Tunisia Jacka now has a lion by the tail. It needs to do what ever it can to hang on.

Assuming that Cooper were to come out with a 2C resource estimate before year end of 160 million barrels ( half way between their pre drill P50 and P10 estimate given well came in high/ good fractures),then that would be 24 million barrels at $10/barrel ( refer Coopers D Maxwell recent interview) that says a number of $240 million without considering the value of other Aboid prospects in the permit.


On that basis I would not be adverse to a rights issue if required. All shareholders treated equally. We could be in for an interesting ride.