trinidad discovery, page-5

bevter,

Have been folowing a poster (Dhatrader) on a couple of my holdings on AIM for the last few years and he just posted this on RRL :
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Folks,

First and foremost, i would like to congratulate PL on achieving what he has done in such a short period. For a small company to go ahead and build an full drilling team and have three drilling rigs soon is a testament to the PL drive.
Patience is needed and so far for the early holders he has delivered big time. Even for the late entrants at 8p like myself its been a fantastic investment.

I started my career in small-cap and i know what it takes for such a small company to build a fully operational drilling crew.......its very easy to sub-contract this work like other small caps but to manage it yourself requires another level of technical capability. The fact they have got moving so fast shows PL has delivered once again.

Now regarding the current well on Morne Diablo, i have some observations. My company currently subscribes to a database that has every well drilled in the history of time anywhere in the world except wells in America Lower 48. So i have access to each well drilled on the Morne Diablo block and can provide a view on its ability to produce.

First and foremost we need to realise the investment case from PL:
Please look at the following slide pack that show Monitor and SOCA buying 90% of these assets from Trincan Oil Limited:

http://www.monitorenergy.com.au/images/monitor---zeeha.pdf

- The current drilling programme is shallow drilling and by the looks of it, its a very quick drill and complete.
- We have about 200 producing wells according to the above report with 600bbl/day production. So lets not set expectations that we will get 100?s of bbl per well. Look at my financial breakdown below.
- The current programme is to only target the current 2.6mmbl Proven reserves. Now it doesn?t take rocket science to understand we didn?t pay $52million for 2.6mmbl proven reserves. We bought the asset for the Herrera formation!!

Financial breakdown:
- According to the SOCA report it will take a Total Capex is $23.87million to take it to 3500bbl/day. Range has stated 4000bbl/day based on proven reserves but I cant find Capex amount. (Refer Slide 20)
- SOCA report says At US$75 WTI ? net margins of approximately $25-$30 bbl after opex, royalty and taxes.
- We are currently producing 600bbl/day ? Oil price is even higher but even if we take $30/bbl figure we are cash generating the following for the yr = 600*30*365 = $6.57million/year. That is enough cash to keep drilling.
- Now when we get to 3500bbl day the net gain @ $30/bbl = $38million. Take away CAPEX of $23.87millon we have a $14.455 million a year net to the company!

Summary:
With three drill rigs running simultaneously for 3yrs you can imagine we are going to be drilling a farrkkload of wells to get to 3500bbl/day. I know I should use 4000bbl/day but I only have the capex (US23.87millon) for 3500bbl/day from the SOCA report. So lets not look at the short-term picture but the long-term picture that the will get us to 3500 bbl/day and be cash generating beautifully.
Also it needs to be taken into consideration that the current state at 600bopd gives us $6.57million which not only funds these very cheap shallow wells but allows us to target the lucrative Herrera formation wells at US$1.5million each.

So add in Texas, Georgia and Puntland and you have a company that is showing ambition. Addition n Panmure Gordon is hugely significant as they accumulate for the big boys?.it?s a fact?.invest for a true rewards which will come!

Peace,

Dhatrader