news due soon, page-66

Why do you think they are performing a build-up test?

TO REMOVE UNCERTAINTY!!!

From my analysis this is where GDN are at:

This is an anticline strucutre. PB#1 was drilled in the sweet spot, while PB#2 was drilled on the outskirts. The Ismay is clearly a gas bearing, commercial sequence. No long duration build-up test has been performed on the Ismay to achieve interpretable results thus far, but it looks a commercial formation (still requires some work).

PB#3 is testing the Zone 5, Gothic Shale Formation, which as stated is a gas rich shale. Build-up test will prove commerciality of this Zone and provide interpretable results for petrophysical analysis and volumetric estimates. Important to note that from modeling of the anticline structure PB#1 and PB#3 fall in what could be known as the "sweet spot" of the field. From interpretation of the varied flow rates at PB#1, one could assume GDN may be able to achieve 3-5 mmcfd from the Ismay formation in PB#3. Naturally a build-up test must be performed on both the Ismay and the Gothic Shale formation to achieve interpretable results and remove uncertainty. One can assume that 5 mmcfd+ for PB#3 is not out of the realm of possibility.

At the same time there is also other issues, which can be put to rest with a build-up test. Build-up tests usually take 2-4 weeks, sometimes longer. GDN are only testing the Gothic Shale formation with the current build-up test program. It has to be done separately to ensure commerciality of that formation. We have seen that GDN have stated the lower Zone 6 is non-commercial, this is the reason for separate testing. Confirmation of commerciality in the Gothic Shale, will allow them to let rip from the Ismay.

If commerciality is proven in two formations from a build-up test, then it is game on. This needs to be completed by the end of the July with continued work over PB#1. Then another independent report must be delivered on petrophysical data and volumetric estimates. This will put GDN on the road to 10c+. Failure to achieve this will probably see it at 2c.

Long-terms will probably never get their money back, but for those that are looking at acquiring now, 4c is a bargain. Company is valued at less than AUD$17 million with, potential to realise 35+ BCF of Gas from both the Ismay and Gothic Shale formations. At least a double up on the cards by the end of the year.