buyers can't believe their luck .. holding back, page-6

Nice move by OSH today - but will it carry on with it. You could argue that it has broken out today closing above the strong $2.45 resistance that has been to much for it on several recent attempts. Then again it was a big day for the market and all the oilers.

It was a good move but the market showed some caution about Nabrajah given that there was no announcement (I believe they will be saying something on Thursday). I spoke to OSH today and they indicated that Nabrajah is indeed exciting and has significant potential .. but its too early to put a firm figure on "reserves" by their estimate. There is also a fairly complex PSC arrangement with Yemen so that their equity share of the project is further watered down. Nevertheless, they pointed out that the Basement in surrounding Blocks is a strong producer and fields are of the 100 and 200mbbl size, and Nabrajah has already flowed well. And the expected production by late 2006 of 50,000 bopd will indeed add significantly to OSH's production and cash flow.

Sounds like they will play it down until reserves are more comprehensively proven by appraisal drilling. I understand that the first couple of appraisals will be fairly conservative step outs that will help define the Nabrajah reservoir, and that thereafter the JV may look to test the potential of the larger Basement within Block 43.

An announcement on FEED for the petrochemical plant pipeline will be the next big news IMHO.

H