june 2008 investor presentation released, page-12

Good overall presentation but I must admit I have had just about enough of the Borsano delays. What was originally supposed to be Q4 2007 has slowly become Q1 2009, and the fact that the drilling has been delayed again, and again, and again, indicates to me that Q1 2009 is absolutely not concrete in the slightest. A real shame on this front.

It is also unfortunate that they will only be drilling one well before March 2009. I expected greater activity in this nine month gap, given 10M in the bank. On the upside, it looks like they will go 6000 metres deep after all at onshore Borsano. 10M would easily be enough to satisfy this requirement financially. I assume that according to the management, the KN-1 success is enough to get the heads well above 35 cents come March 2009, otherwise it would be ridiculous to burn up to 10M on a virtual wildcat exploration well - (4KM from major field is still wildcat) before they expire.

On the other hand, the absence of any other drilling activity augurs very, very well for news flow out of KN-1. As I said, it appears the management think KN will be a company maker, so there will definately be some explosive news coming out of KN. This report - IMO - is a preamble to a world-class reserves estimate. Look for a solid P2 calculation and a P3 estimate that will surprise on the upside, IMO.