updates and information, page-7

Some thoughts and figures.....

* As at 30 June Pryme had total current assets of $5.2 million
* First half revenue of $1.8 million
BUT
* total loss of $576 000 after all costs

Some thoughts for the second half....
* Exploration expenses ($570 000 in 1H) should be down as no wells will be paid for up front and there are 2 workovers at Lake Catahoula (approx. $100 000)
* Also there are hopefully no more bad debts to be factored in ($330 000 in 1H)
* There will be a decline in revenue as the 2 Lake Catahoula wells are offline and worked over.

So hopefully the revenue and costs will end up about neutral.

Then we have:
Share placement - $1.8 million
Rights Issue - possibly $2.0 million

So excluding Turner Bayou costs/income Pryme could possibly $9.0 million in the bank at FY2010.


Turner Bayou -
For the 15,000 acres farmed out the agreement says:
"Under the terms of the farm out agreement, Pryme will receive a cash payment of US$500,000 and a free carry on the first two wells drilled within the project area. The carry consists of a 25% back in after payout on the initial well and a 25% carry through to production on the second well proportionate to Pryme?s interest being farmed out (4% net carry to Pryme.) There are a number of Austin Chalk well locations within the project area and the parties will bear the costs of the third and subsequent wells in proportion to their working interests."

My understanding of this is that on the first well, Pryme receive $500,000 pay nothing towards the costs of drilling and production facilities but don't receive their 25% until the other parties have had all their costs covered.

On a second well, Pryme pay nothing to drill and complete and receive 25% of production revenues (no waiting for cost recovery on this well).

Pryme estimate 1500-3000BOPD initial production rates and less than 3 months for the well to pay for itself.

Overall, FY2010 should see Pryme with about $9million in the bank with revenue from the first Turner Bayou well (and possibly a second) coming in the door during the 1Q of 2011.
1Q 2011 should also see Lake Catahoula drilling recommence.

Flow rates are likely to decline quite rapidly but given success at Turner Bayou, Pryme chould be cashflow positive in 1Q 2011 and have $5-10 million in the bank.

Crystal ball gazing I know, but this potential is why I like Pryme. If (still a big if!) Turner Bayou is successful, then they should be off and running as a small, cashflow positive, oil and gas producer.

Cheers,
turtle