1 million dollar profit, page-18

Hi Onneata

They will have no problems with FIRB, its more of a rubber stamp in this case.

I think the problems going to be the details in the deal, how much cash, timing of cash payments and what percentage they buy.

So in order.

Cash - well maybe $600m but it could only be $400m which mean that AED need a rights issue to fund further appraisal.

Timing of cash - all up front, spaced over 6 months who knows.

Percentage of the oil fields - well we know that its 60%, what if they say we want 75%, what are the Directors of AED to do? Agree, well they have to as there is now where else to go.

Conclusion.

AED have no bargaining chips, SINOPET knows this so expect a really hard bargain from them. The high oil price will help AED.

Downside risks.

No deal = receivership look at the 1/2 year accounts for that proof.

A deal but hard = small percentage left for current AED shareholders and possible right issue to fund ongoing drilling program.

What ever happens the AED share price will suffer and the number of staff and Directors at AED reduced as they will no longer be an operating oil company.

So my advice would be to sell AED and invest in other less risky oil companies such as BPT, STO, ARQ and INP.

cheers

PC43