Ann: Operational Update - Significant Progress on all Fronts-88E.AX, page-161

The VERY interesting comment made by DW at the recent AGM was " they were happy with what they had"

Now this is post the Ice 1 analysis and seismics being completed.

The implication being that what they have they are content with.

Just on an F/A note, the further south one goes the more one gets into the Brooks Range Orogenic belt, or the tectonically affected strata. If there is any folding /faulting that has created conventional traps for the Brookian sequence then it will be the initial ones that provide most of the trapping potential so one would think the further south one goes the more you get into uplifted sequence which would result in both more strata destruction as well as weathering/erosion of the traps.

The primary target is the unconventional vapour phase liquids of which the BPSM shows the Thermal Maturity extends ACROSS the NS East/West in 88E/Bex acreage. This zone will be relatively narrow and if one references the Eagle Ford overlay in a few of their presentations one gets an idea of just how narrow this zone is North to South in trems of 88E/Bex acreage.

The other factor is money. Yes we have just raised 25M BUT much of any excess will be reserved for Ice 2H now that its apparent they want to de-risk as far as they can. They have still taken significant risk up by buying the new East and West acreage and these zones are yet to be proven as to whether the same strata qualities extend into these zones so to buy up more acreage until we know whats in these new zones would possibly be throwing cash straight into the fire. Imo this will take more drilling and that will need more cash which will really only be justified if Ice 2H shows us good/excellent flow rates. Being justified and being able to drill is also two very different things. The only time at which theyd probably then drill this new acreage was when they had significantly more cash post Ice 1/2H acreage development.

The acreage further East I believe is restricted from exploration but the strata significantly narrows due to the Orogenic belt swinging to the north not far to the east of our current new acreage. It is also across the Sag river which makes access that much more difficult and to build a bridge across a significant braided stream is major work. There is no point in simply making a ford across these rivers as they can be quickly destroyed by seasonal snow melt from the Ranges to the south. again significant cash required here as well.

So de-risking the resource in this new acreage will all be laterally dependant on Ice 2H showing us the necessary goods to attract cash via a deal imo.

d.