Ann: West Erregulla 2 Update, page-38

Hi eddiev,

did you read the announcement from yesterday?

We have “pronounced” (I like that adjective...) oil and gas shows in two different sandstones which were not classified as even tertiary targets of this drilling.

We have “fair to good visual porosity” in both formations which is a necessary precondition for a commercial success and “good elevated” gas readings.

The last time I remember the classification “elevated gas readings” from STX were in the glory days of TX Wilcox drilling and Duncan-1 (which flowed 10 mmcfd initially) - some STX veterans like my self may remember this...

Or in other words, it’s possible, that we have a commercial o+g discovery before we approach the main targets of this project...

But even if the layers are too thin for a commercial success (what we currently not know), these results confirm at least some preconditions of the geological model behind this drilling and the COS in the main target should now be fairly higher then 69%.

But it could be better than that...

The good thing is, we will know it very quick. Log results of the entire section should be available by Friday next week.

I’m excited...