general thoughts...

Guys,

Rarely have the time to post nowadays but after catching up on ann's I noticed there's been an interesting series of events the past few weeks. After taking the time to digest this and reading a few of the posts here I noticed some of the uninformed are incorrectly criticising the board of CTP without fully understanding and/or appreciating what the board has actually done.

Based on recent events, it seems the board of CTP has had enough of its JV partners lack of commitment to expedite exploration in a timely manner so by law it has issued them with default notices. These notices are to PXA, HeN, ROG NT/ Red Sky Energy. Noticeably, Trident have not been cash called which shows at least one party is fully co-operating and serious about exploration.

If one is looking for the persons responsible for the lack of progress look to date, look to PXA, HeN, and to a lesser extent ROG. In all fairness to ROG, they at least have the smarts to respond in the required timeframe. The release made on the 12th states they will commit to the NCR wells and elected not to participate in some of the other permits. That�s fair enough if it does not align with their business model, as long as they keep up with the cash calls. Looking at ROG�s balance sheet and current commitments I don�t think they�re able to do much more at the moment.

PXA imho are becoming a serial pest to the development of this company by once again disputing the agreement they signed and referred it to arbitration. When PXA farmed in, they agreed to legally binding terms as set out in the FOA/JOA and relevant requirements by the NT Dept of Mines and legislation such as the Petroleum Act. Although some terms in this agreement may be open to interpretation, the case they are arguing this time seems black and white. Why I believe this is black and white is outlined below.

Their argument claims the default notice is invalid. The default notices CTP submitted are based on the fact PXA et al have all failed to meet cash calls in the required timeframes as stated in the JOA/FOA. Now under the JOA/FOA these cash calls are required to satisfy the Dept of Mines minimum expenditure commitments. The cash calls relate to both exploration and seismic obligations.

In the case of PXA, they originally signed agreements to:

- Pay 40% of the cumulative seismic works costs up to a cap of $3.0m (which totals $1.2m for their 40% interest).
- Pay 40% of the coring works for NCR wells
- Pay 40% of the drilling costs for the first 3 prospective drilling targets in each permit.

See announcement made 15/02/2008 for details.

When a Farmee commits a material breach of any of its obligations under the FOA/JOA (which clearly includes failing to pay cash calls) then CTP has the right to serve notice on the breach and request it is remedied.

Should the default not be remedied (or is incapable of being remedied) within 7 days of default notice the non-defaulting parties may submit another notice which gives the defaulting parties an opportunity to reduce their participating share interest to match the actual contributions they have made. This opportunity is at the discretion of CTP (the Farmor) and non-defaulting parties (pending powers).

If within 30 days from receipt of the notice the defaulting parties do not remedy the situation or agree to alternatives at the satisfaction of CTP, then CTP has the right to terminate the agreement and the defaulting parties would thus have no further rights in the agreement other than drilling interested earned earlier.

Whilst the default companies are in the default/negotiation period stated above they are :

- NOT permitted to vote in or call any OPCOM meeting;
- NOT entitled to exercise any right under the JOA agreement other than default remedy clauses;
- NOT entitled to receive or use any information with regards to JVO�s
- NOT allowed to participate in any sole risk exploration campaigns
- NOT entitled to access the JOA area etc etc.....

Basically defaulting parties are not entitled to anything in the JOA/FOA other than the clauses which try to remedy it.

The non-defaulting parties (ie Trident) are still entitled to vote at OPCOM meetings based on their relevant interest. If a defaulting party is reinstated by legal action or payment of outstanding debts etc, it will therefore be allowed to vote in OPCOM meetings, but any votes and arrangements made whilst they were in default stand as is. Ie� if CTP and Trident agree to drill Johnstone, I don�t believe any of the defaulting parties have a say on the matter.

As we know PXA chose to go to arbitration. I get the impression PXA simply want to delay the programme as they are either under resourced, BG aren�t feeding this business unit the required cash or a severe mixture of both. In a post I made some time ago I noted that in an arbitration situation there are specific timeframes. Once a notice is served, within 5 days of notice the parties must meet and use all endeavours in good faith to rectify the situation. If a dispute is not settled by negotiation with 14 days then it is referred to arbitration which is administered by the Institute of Arbitrators and Mediators Australia, with arbitration held under relevant WA acts. I�d wonder whether PXA even bothered discussing in good faith and went straight to arbitration to cause further delays, they clearly aren�t co-operating. Keep in mind last time the parties went into arbitration over the programme, we saw an announcement out not long after with an agreed development proposal. The arbitrators did not waste time and saw the agreement as black and white. I�m sure the board of CTP were also in close communication with the NT Dept of Mines before they issued defaults given they are (in effect) the controlling body.

Realistically the clock is ticking for the company to get works done to satisfy min expenditure commitments as agreed with the NT Dept of Mines and further to this it is possible one or more of the company permits stand a minor risk of a percentage relinquishment (from memory around 25% of a permit) if no action is taken by itself or its partners. Given the dramas seen to date, I would support the board if they went down the path to kick out all defaulting JV partners. HeN have no money (at least until they raise it) and PXA keep wasting everyone�s time including the board of CTP, all the shareholders of CTP, the NT Dept of Mines, Arbitrations Panel and all ancillary company time such as drillers etc. This is unacceptable and cannot continue in this manner. Everyone may like to see a company such as PXA involved due to its connection with BG, but if a company is not pulling their weight, big or small they need to go and the company must get on with the job at hand. To date it seems to me that PXA have caused more delay and frustration than company growth.n

In my personal opinion, I believe the board entirely is doing the right thing by undertaking a material raising, and undertaking it now. The capital injection will allow them to go out and drill, and eliminate the need for PXA and the rest of the deadweight the company has been carrying for the ride. The board has firmly pushed ahead with its commitments to both the NT Dept of Mines and its shareholders by defaulting the parties which are holding it back. It has also investigated rig availability and issued letters of intent for rig use. It seems everything is basically in place to go. If PXA had a serious commitment, clearly with all the hard work already done all they have to do is say yes, commit the cash to the agreed programme and we�re out there � but they haven�t.

As we know, Ooraminna, Magee, Johnstone (or possibly another oil well) are all very strong targets. Ooraminna has been a personal favourite of mine from the start as a priority target, and I know others here who love the helium are awaiting the drilling of Magee 2 as soon as possible. If the company successful drills any of these wells by the stated timeframe, it will have access to another c.$24m+ via the CTPOA which expire in June. This money alone would comfortably drill another 3 or 4 solid wells or facilitate production if one of the oil wells comes off. Once producing the company will be an entirely different beast let alone the benefits a successful exploration well brings (there would be no shortage of potential farm in partners).

Anyway, that�s my thoughts for now but I must run. The above comments are my interpretation only based on my understanding of the situation from information released to date (so take no responsibility for anyone�s actions over them). Some may agree with the above, some may not but I�m sure everyone - particularly many of the guys which have been here for the past few years - can at least agree that something needs to be done and I think the board are on the right path to getting there.