Ann: Petsec Energy 2012 Annual Report , page-2

The AR is well worth a read. Some quick take aways.

1.TF agrees that production will know be well in excess of the 2.9 BCF Jan projection.They are currently at 12mmcfd equivalent but there will be some stoppages etc. howvere marathon 5 will be added in 4th 1/4.

I thus feel we are looking at around 3.5bcf this year plus around $2m rev from oil.It may be slightly more.

2. On Alberta-whilst its slow it is happening. I note also PSA has upgraded potential net recoverable from 10m bo to 15-20m bo.Why have they done that unless they feel flow is indicating something? Time will tell.

They do indicate they will increase the no of horizontal wells in 2013 and expand acreage.

3. USA shale.
They have entered jvs with est oil shale operators. $ study areas selected and two sweet spots determined where they feel greater than 2000 bo per acre.Lease acq begun and also for farminees.

It sounds further advanced than we realise but will still be slow as drilling will take time.

4. GOM

Some very nice GOM targets on their radar now that NG is above $4 ($4.40 last night)

5. Positive tone.

this is the most positive and proactive tone I have seen from Psa in many many years. i am a fan but they have a business plan which includes being frugal.

It appears it was prob one buyer who has picked up 800,000 since yest. In this market selling will always continue but a vote of confidence