Cairn Preliminary Results and Cath's MMC Presentation, page-12

Hi H,

1. There should be a decent chance one would think of having some of that 2C resource being
upgraded to a 2p/3p category, after 2 extensive appraisals /successful flow tests. What %, if
any, remains to be seen, although I would speculate on the minimum side at this stage if any
were in fact to be upgraded into the "reserves" category. 1P, to my understanding, can only be
assigned after continuous production of say 6 months. I would venture that the 2C may be upgraded
to 670mmboo {moved up from the 3C category}, with 1C at 330mmboo {combination perhaps
of 1C/2p/3p}. This would, I think, be a tad on the high side at this stage, but I remain hopeful.

2. The aim of this current 3 well program was to prove MEFS. 200mmboo is probably over the
line already. They may wait on the results of Lower Bellatrix {SNE4} however, to officially declare
it.

3. Forward plan/contingent wells and the "freeby". The "freebys" odds of coming to fruition
in this current campaign may have dwindled somewhat, although it remains a possibility.
I think if SNE4/Bell can go off without a hitch, it still may get up. I expect the forward plan
{next 3 well program} to be announced as a "goer" without the detail as regards actual drill
targets.

4. DOC...I don't think we will see DOC this time around. I think they will wait until "connectivity"
between the reservoirs has been proven. This may happen after SNE4 {SNE3/4 having the
necessary equipment now to prove this} or it may require a few other holes in SNE with guages
etc or re-entering SNE1/2 to prove it across the field. Not technically proficient in this area but
I still think DOC will have to wait, officially at least, and by definition of course, the control of
operatorship by COP.

5. The need for $$$. I contend it's probably still too early for a cornerstone investor @ a premium.
I think anyone wanting to pay a premium would want to see that DOC first. A partial sell down also
too early for mine...how does one put a value on it with any reasonable degree of accuracy at this stage?
Debt is out of the question without reserves, what reserves will be declared {if any} at this stage would would not be sufficient to enable debt financing of any meaningful degree.

I still contend we are in for a wait as regards a cornerstone investor, any meaningful T/O offers
or DOC. However, if the resource upgrade is meaningful {particularly in the 1C/2P/3P category}
and the SP does manage to spike a bit more than post SNE3 results we could raise $ @ hopefully
the 12-14c mark, to see us through to the next 3 well program. Probably a placement at a discount
v retail offer this time around. I still think they will raise $$ prior to Bell, particularly if the spike
from the resource upgrade eventuates, rather than risking a duster @ Bell and perhaps a
deterioration in sentiment & the POO that may accompany it within this time frame. Previous
form as regards CR's certainly points in this direction. Great resource upgrade, continuing
improvement in the POO and a corresponding spike in the SP......get it done & dusted.

Of course, IF Upper & Lower Bell prove successful, then DOC, COP & T/O may very well
be out of the starting gates at this juncture, as well as maybe a cornerstone investor at a
healthy premium, should FAR decide to get really cashed up, improve the quality of the
register & further guard against any silly T/O offers.

Just my 2c {or should I say 2P} worth . That's where my thoughts/head are at the
moment.

GLTAH