operational update, page-41

Hi,

These wells are on the land we sold to CHK but to do the horizontal (as per the length suggested), it will come onto our land (in one case 15% and then in other case 25%). So to drill these wells with the lateral length suggested, they need our permission and participation (otherwise they will have to shorten the laterals).

The question we need to ask is why they are interested in exploring the extermities of their land. The answer may be

a) They need to drill to hold the lease in that patch of land

b) They know this area is extremely good and want to exploit it (if their only reason for drilling is to dress up the land and sell to someone else - they need wells generating higher flows)

c) They want access to 3-D around that area (cheaply) - so going in partnership will help (as TB will want to make sure that well orientation is correct even if we are only 10 to 15%)

d) The area has conventional trap beneath the unconventional formation

To me, it looks like b) and/or d)