our current position, page-74

From Scottport I'd say the second paragraph is certainly relevant to Silverwood's latest drilling report:

"Conversely, if the mud weight is too low it will have a hydrostatic pressure that is less than the formation pressure. This will cause pressurized fluid in the formation to flow into the wellbore and make its way to the surface. This is referred to as a formation "kick" and can lead to a potentially deadly blowout if the invading fluid reaches the surface uncontrolled."

From the latest drilling report:

"LOST PRESSURE; LOOKING FOR WASHOUT; LOST COLLAR; FISHING; M&P 446 SXS; P/U DIR TOOLS, TIH, TIME DRLD T/ 5848'"

So I'm guessing:

LOST PRESSURE - due to mud weights too low

LOOKING FOR WASHOUT - waiting for evidence of fluid to reach the surface

LOST COLLAR - Whist trying to fish out equipment they also lost the collar in the process. "A collar or coupling of tool steel, threaded internally, that can be used to retrieve pipe from the well on fishing jobs; the female counterpart of a taper tap. the die collar is made up on the drill pipe and lowered into the hole until it contacts the lost pipe. http://oilgasglossary.com/tool-joint.html"

FISHING - Well I think we can all imagine what's going on here!

M&P 446 SXS - Maybe the type of drill bit/equipment they're trying to fish out?

P/U DIR TOOLS - Pulled up remaining drilling tools?

TIH - Trip In Hole - "Gas that enters the wellbore when the mud pump is shut down and pipe is being pulled from the wellbore. The gas may enter because of the reduction in bottomhole pressure when the pump is shut down, because of swabbing, or because of both." Gas already??? However probably at a level not worth reporting.

TIME DRLD T/ 5848' - Maybe this was the depth at which the problem started to occur???

All just guessing of course....

Certainly appears to be a few issues here but not necessarily a P&A at this early stage.

Disc: I hold AUJ