Ann: Mukuyu 1 & Sidetrack Well Results Amendment, page-292

For what it’s worth these are my thoughts for discussion.

1. ST-2 would still be subject to long lead items (more mud - by the sounds of it even if they stay with the water based mud they don’t have enough left) and mobilising the next services subbie. So by the time both of these are on site the question is - do you drill a side track for $2m or $3m and then spend a month moving the rig to Mukuyu-2 which will be drilled inevitably anyway (whether ST-2 declares the discovery or not by obtaining a fluid sample - Scott’s words not mine). Or do you upgrade the rig and have it sitting at Mukuyu-2 ready to go for the new mud system and services company. And be located in what could be a better location for reservoir thickness and quality. I’d probably make the argument that the side track costs would be unnecessary. You’ll achieve the same long term goal cheaper by going straight to Mukuyu-2.

2. The 3D seismic is an odd one. You could make the argument that Mobil shot 2D and IVZ followed up with 3D, given the size of the structure. Either way Scott said in the webinar we already have a “very dense seismic grid” over Mukuyu. But it was in the same discussion as saying that infill seismic was needed for Mopane and some other fairway prospects. It sounded like he was saying we needed a 3D survey on Mukuyu as well as infill seismic on Mopane before we drill the next well on either but it would be good if he could clarify this. I would have thought stepping up dip a touch for Mukuyu should be safe. But Mopane definitely needs infill before they drill.

3. Same as item 1 for me. I think going straight to Mukuyu-2 would save the cost of the side track and give us the same, if not better result.

4. 100% agree that Mukuyu has to be proven first. With the exception that technically Baobab is ready to go now. So if we have funding/jv, long lead items, rig maintenance done and the new services company on site before they’ve selected the Mukuyu-2 location then it might be logical to squeeze Baobab in first. Not even sure how long infill seismic for Mopane would take to make that an option.

Cheers….