operational update, page-47

Buc, Alacrity, good point of discussion. Its an age old question - go it alone to retain 100% WI vs farm someone in to fast track development. I always favour retaining 100% WI if possible, and I see no reason why SSN couldnt pursue that path with the cash it has and with oil revenue likely to imcrease sufficiently by the end of next year to generate the free cash flow to fund further drilling at a decent pace.

Buc I think giving 40% away is too expensive, but thats just me. We will already be seeing the FPEC tribe back-in 33%.

I think this is an opportunity to get creative in solving the problem. Remember the problem here is really the availability of frac crews, so we need a deal which would overcome the frac crew bottleneck. So throwing 40% interest to expedite the whole drilling process is overkill imo. We only need to put out a sweetener to expedite the frac crews.

I would suggest two options that could be considered:

1. Pay the regular amount for each completed drill (estimated to be about $4M for the Roosevelt horizontals?), but then offer a 5% royalty interest (split 33/67 with the FPEC indians of course) to the frac crew/operator to get them to do our wells preferentially over others - ideally we'd do a long term deal with one good frac crew operator to do all our wells.

2. TB has wisely contributed to the FPEC community by funding some scholarships. What about funding the training of enough of them to form a couple of frac crews that would work on our joint wells?

There's always more than one way to skin a cat. TB is pretty shrewd hudging by some of the deals he's done - I'm sure he could come up with a creative solution.

Cheers, Sharks.