ann out, page-29

Everest and Paul,

Not belittling, just amused and slightly bemused by your obvious prejudice.

Firstly Everest, you say the quarterly will disapoint but give no indication so towards your own expectations of the cash burn?

So you ask us for our view on what is acceptable and what is not but have no view of your own?

Also, if you thought the price was going to be higher and knowing the date of the quarterly, would you not be going long then going short after that date?

It could maximise your profits?

Finally, as towards your assertions of the JV:

Firstly, Gulf has a MINIMUM wells, not a maximum. Assuming to know what Gulf and MAD are doing, and also ASSUMING only that they are doing the minimum commitment is your own choice and a prejudiced one at that.

Secondly, I doubt MAD would announce everytime Gulf was committing more funds for the next 3 years (until CY2015).

Thirdly, We don't know how many small wells but with 2 rigs constantly drilling High impact and a third doing the starter section (down to 2000ft) that means of the remaining rigs, only 4 are available to drill new wells.

This would put them on target to do a maximum of 16 this quarter new wells, I'd say they would probably drill 12.

The wells are most likely in the nash and BR dome in the most prospective oil section for gulf to get the most out of it and continue their involvement.

The majority of the extra oil coming out (increase has been 600 bopd since november, equiv to 24 wells) would most likely be the workover of underperforming wells, or shut in wells.

Remember 1 new workover rig in january and another 2 coming online in march I believe.

Finally, now with these two high impact successes, expected to be over 100bopd each, should well and truly cover the cost of those wells within a year.

I would expect cash position to be 50mil+. Expenditure to be around 10mil with oil sales of 6-8mil.