KISS Principle, page-47

Hi psi

Firstly, can I prefix these remarks by saying that your posts are always appreciated and respected.

I do wish to suggest however that you have a significant factual inaccuracy in the above. No rig at surprise ever fell over; that was at Mount Kitty and it was not our company's rig – the rig was under contract to and operated by our joint venture partner STO. Possibly you were referring to the monkey board incident that did happen at surprise but in an earlier hole.

That was almost one year prior to the successful sidetrack drill that was completed in early January 2012.

It may sound as though I am picking holes in your post just to be indulging in pedantry; but that is not the case. A lot of new shareholders come onto this site and they make observations of what they think is past history which then becomes received history. The new shareholders repeat that information. I feel that I owe it to the company, myself and other shareholders to try and prevent these legends developing.

The number of times that I have observed the Mount Kitty rig topple being attributed to our company as distinct from where the blame really lies – with the operator's drilling contractor – is quite distressing. It is not good to let these inaccuracies sit on the forum to be adopted as the truth. Similarly, I saw a post recently which suggested that the rig topple happened at Whiteley in the Southern Georgina basin. Again inaccurate and prejudicial to the good reputation of our company.

In an attempt to contribute something positive I will now share with the forum some very significant information that I picked up at the annual general meeting. Firstly, the wells in the Southern Georgina basin are costing approximately $15 million each. Don't ask me for my source. All I can say is that the figure was explained to me and I find it quite credible.
Remember these are not coal seam gas wells at Parramatta.

Mobilising a rig (80 semitrailer loads of equipment) from its last job – typically in the Cooper – throughout back New South Wales and Queensland over some truly inferior roads and assembling the rig on site – well over $1 million. Site preparation for the well under the conditions applicable in the Southern Georgina Basin (environmentally sensitive area) – well over $1 million – and so it goes on.

Some posters may remember that I posted my analysis of the cost of the successful surprise well (not including the cost of the well that was fouled up by the monkey board incident). The company's expenditure between August 2011 and March 2012 on "exploration" (the successful drilling of surprise) $13 million. The additional cost in the Southern Georgina basin is probably linked to its high environmental sensitivity regime.

More information: – there has been a lot of fuss about the Whiteley well-being unsuccessful. People have compared it to the case of "the rig fell over". It is just not that simple. What actually happened, and this is not a guess – the information comes from an extremely reliable source –, was that the drill encountered an underground cavern of significant dimensions.

Geophysically this is not a serious problem. Mechanically however it is a major nuisance. The problem is soluble by the installation of an artificial wellbore (described by our managing director as a "sleeve" in one of his announcements) through which the drill may be guided to intercept the next level of solid material.

The device that will act as the sleeve is of major technological sophistication and is only manufactured at one place in the world – somewhere in France. It will arrive well prior to the next drilling season and will enable us to complete Whiteley. By the time we begin on Whiteley we may well know the outcome of the desorption tests being conducted on the Goudie cores. Who knows it may be party time by then.

Cheers to all of the patient people in the group of shareholders who post on this forum.