Value of Kingia and High Cliff Reserves, page-25

Al, what would be your guess about how much of the 2C is 2P in the August report. Thanks for reporting AWE's convention for 2P reporting.

Regarding whether the market values 2C reserves: First, is it a bull market or a bear market for the underlying resource? During crazy bull markets, no one seems to care whether the reserves are 2C or not. Any 2C declaration can send the stock on a run higher. But when the underlying resource is challenged - and oil and gas markets are under definite price pressure since Q4 2014 - markets tend to ignore 2C. Second, quantify your statement. You can disagree and say that 2C has value. But give us a formula for the value of 400 Bcf of 2C gas, and let's compare that against the market cap of AWE. I don't think it moves the needle much.

Using my superficial calculations above, 400 Bcf of 2P reserves changes AWE's enterprise value by about $680M dollars. Comparing that against the current market cap of $710M, that is a huge re-rating of the stock. In the current market, 400 Bcf of 2C reserves result in small moves up or down. Essentially the change in valuation is nothing against the market cap. I'm interested in understanding what reserve changes will result in valuation changes that make me very substantial amounts of money. I can't get interested in 10 cents up or down in the share price.