the next woodside of the geothermals, page-13

PAX commenced as a one man show and became a very small company but with assets and expertise. I have had some reservations about its tiny size to be performing in a variety of projects on the international stage. Would overseas companies (for purposes of JVs) take PAX seriously? It really needs to get higher profile runs on the board. Its cash position would hardly drill one well in one location. The proposed merger with Osiris provides for some magnificent openings. The Limestone Coast project when bought from Scope Energy was billed as drill ready. On later closer inspection the 'data' was a little inconclusive and more survey work needed to be done. The three existing troughs certainly are highly prospective but more work requires more time and more funds. The Osiris Penola Trough appears to be better researched through the availability of more petroleum well data. Sinking a first deep well in Penola seems a least risk way to go.

I suspect the technical fellows in the respective companies have been talking over the back fence including the joint hiring of a sizable drill rig. Hence the question: "Why are we doing all this separately, pretending to be competitors and keeping data secret from one another?" As well, the Cooper Basin GELs Bertus would know only too well. Enough time has passed for any tender feelings to be attenuated on GDY. He is the expert on the area. 4000 wells of data are available to make the geological risk virtually zero. It was Bertus' careful work that also reduced the technical risk and enabled GDY to eventually drill Hab 3. PAX would only have to wait a little for GDY to prove up its step out wells from Hab to Jol to Sav in a roughly N.E - S.W. direction. Osiris' GELs 221 and 220 immediately butts along the full Southern length of the of GDY GELs 99, 211, 97, 98. It would require only a minor extrapolation south and PAX could capitalise on all of GDY's data, experience, and high temp HFR site. How little risk is left? All this at negligible cost.

Getting geothermal electrical energy to market quickly is becoming a key factor in being taken seriously. Any achievements in the LC region will establish international credibility for JVs in overseas projects. I see this as a necessary significant positive push for scale.

The difficult issues to resolve are the dollar value of Osiris, and the likelyhood of fund raising the desired $25-30M. You need runs to get funds but you need funds to get runs. Temporarily awkward.

Juke