Ann: Third Quarter - Activities Report , page-11

Huaneng

I feel there is a completely reasonable alternative explanation for the slow release of flow data from Kingfisher.

Remember, Kingfisher is but a single well within a single gas field in MEL's acreage, which per slide 10 of the recent presentation includes 21 gasfield/prospect targets.

Remember also, Kingfisher contains a combined 30m or so of "gas pay" and a further 130m of "gas shows" ... conventional logic is that gas pay zones might flow freely and gas show zones might flow with stimulation. All of this occurs from about 900m to 2200m.

Remember also that a pretty significant flow was obtained at the base depth of Kingfisher, the 3 mill scf/day from the first 3m of tested gas pay. This means it is highly probably there is significant gas below base depth of Kingfisher, particular as the most likely source of the gas is from the underlying Ipswich Coal Measures.

I'd have to think that the "reservoir" as being analysed from Kingfisher and 2D seismic is quite complex.

To summarise MEL's PELs (forgive my poetry lol) ...

PEL 16 >>> Kingfisher/MacKellar gas fields and MacKellar Nth prospect (Pm/286PJ to P10/2765PJ ... with current Kingfisher only accounting for just Pm/77PJ to P10/284PJ)

south to

PEL 13 >>> Rappville Updip/Rappville West gas fields (Pm/120PJ to P10/1287PJ)

further south again to

PEL 426 >>> Tullymorgan/Banyabba gas fields (Pm/117PJ to P10/1344PJ)

The above targets represent just 6 out of 13 gas fields and just 1 out of 7 prospects identified on slide 10 of the recent presentation. These 7 gas fields are discrete and combined have Pm/523PJ to P10/5396PJ.

If the three targets in PEL 16 are connected or part of the same structure, then by visual extrapolation to include the areas between, Pm/P10 values could be double or triple the sum of the discrete targets.

Ditto if the two targets in PEL 13 are connected or part of the same structure, then by visual extrapolation to include the areas between, Pm/P10 values could double or triple the sum of the discrete targets.

Ditto if the two targets in PEL 426 are connected or part of the same structure, then by visual extrapolation to include the areas between, Pm/P10 values could double or triple the sum of the discrete targets.

If the above was shown to be the case, Pm/P10 values for the 6 gas fields and 1 prospect could be anywhere between 1046/10,792PJ and 1569/16,188PJ.

Who wants to estimate what the Pm/P10 values might be for the not so crazy possibility that the 6 gas fields and 1 prospect are connected or part of the same structure?

Methinks MEL have quite a journey of discovery in front of them ... for now, I am glad they are an organisation dominated by engineers, geologists and scientists ... and for now, I can only hope they are being careful to recover the maximum amount of data they can from the Kingfisher well.

Cheers
Dex