rogermontgomery.com, page-6

Conventional valuation of an unconventional play.

Reserves are proved up by drilling - which is not stop under the current programme. So, do you wait until NSAI amend the categories on their certificate or do you accept the progressive conversion of 3p to 2p as wells are drilled and produce?

Problems encountered to date have involved engineering aspects - they do not colour the recoverability of reserves. No dry wells have been drilled to our knowledge.

The technology is improving all of the time as is the experience.

The reward for risk is return. If Mr Market does not like the risk, he will not pocket the return. Compared to the risk already borne by LTH's over the past 5 years, the current risk is all but insignificant. Compared to the risk of investing in an oil giant, the risk is significant.

As I have said, I view AUT currently as a project in a corporate wrapper. The criticism levied at the passive involvement of AUT is misplaced. It is currently its strength. It makes the company transparent to investors familiar with the project.

As to the heavy Board: AUT has achieved some of the increase in value for shareholders through successfully raising capital and the cost of the additional Board members is peanuts compared to that value. And time was against the JVPs - they had to launch an aggressive drilling campaign to secure the leases. That, they have done but AUT could not have paid its share without raising that extra capital. It then could not have boosted its net acres by 50% at a bargain price without raising the $100m+.

There is a point where conservative valuation drifts into lack of vision. Mr Market is in the wrong market or the right market but the wrong end of it. He can keep his 25% secure reward and I will pocket my compound 900%. Horses for courses, as they say.