Ann: OFF-MARKET TAKEOVER BID FOR XCD ENERGY LIMITED, page-29

Quite a few unresolved questions in my mind:

• What is the rationale for apparently land banking new and unfunded 'nearology' project areas when current projects are as yet unfunded or unfounded?
• Would 88e have contemplated this transaction if Charlie-1 was an unqualified success?
• If so, what would the rationale for doing so be (in that scenario)?
• 88e's MD appears as XCD's largest share shareholder and 88e's Chairman also appears as a significant shareholder of XCD. Additionally, Erik Opstad appears as a recently appointed consultant to XCD. Does any of this mean anything? Should it mean anything?
• What is in it for the XCD shareholders, other than a premium to historically low SP and potentially a more tradeable currency? If Project Peregrine has significant potential, why sell it for A$7m?
• Do we inherit any talent of note (board, management and/or geo) in this mooted acquisition? And do we get an opportunity to offload any 'talent' deemed as superseded by this acquisition?
• Will the post acquisition SOI size inexorably lead us to consolidation, and if so, does this transaction provide enough of a narrative and near term operational activity, to halt if not reverse the SP trend, post consolidation? Will it withstand the inevitable CR required to keep the lights on beyond end of year?
• What has been the impact of the size and appetite of potential faminees for activity in the next 12-24 months? How attractive is our offer given other opportunities...including the opportunity to do nothing for now?
• Are there any undisclosed liabilities or obligations that are incurred as a result of a company take-over, as opposed to an asset purchase?

My quick, back of the fag packet calcs suggest 390m risked bbls of prospective resource. Of which about 275m bbls 'testable' by 2 relatively shallow wells targeting the Nanushuk. The balance being testable through a deeper Torok targeting well. Independent 3rd party resource estimation and risking based on invesion processing of vintage 2d seismic. Deemed by XCD management to be ready for farming.

So our current 12 month outlook which is wait for Charlie final results, progress potential farmouts in HRZ, IW Seebee and YG, would potentially be augmented with additional 2d seismic based FO discussions for Project Peregrine (PP). Unless I'm missing something, this does not appear compelling for 88e shareholders.

Obviously need much more info and compelling rationale to properly evaluate the merits. In the absence of that, it reeks of an attempted distraction at best.

All IMO and GLTA.