why all the uncertainty, page-2

Hi Jimbo. I am not sure how much experience you have investing in shale/unconventional oil and gas stocks, but personally I don't think there is any unusual "uncertainty" in terms of PRL at present.

In a nutshell.

This is a research project that will take months, not days. it is not a high risk conventional oil project where there is a quick outcome from spud (e.g. TD reached and either commercial oil is present or not).

So where are we?

The recent PRL and Uruguayan Government (ANCAP) results have started to significantly de-risk the region and protect our investment. In particular it is very encouraging that there are signs of a hydrocarbon system in the region, which was previously unknown. We now need to find out if there is "cooked" oil that has migrated into conventional deposits in the basin in commercial quantities, or more likely, be sitting in concentration in the shales we now know exist.

Next steps?

We will have to wait to see the results from the labs in a months time in terms of the extent of "cooked" oil present in the first core hole, but given the depth (being on a shallower side) the next one is more interesting (shale oil is usually found 1km + and the Barnett and Eagle Ford go much deeper, from memory). As such, I am very excited to see how we go at depth in the Cerro Padilla well. Hopefully we collect enough positive data to suggest shale oil exists somewhere in the Norther Basin in quantity to the extent that PRL exercise their option to 51% of the project, through the additional investment of $5.5m.

It is encouraging to note, in the 16 October announcement, management noted seismic "permitting and approvals processes already commenced". So my money is on the fact they have already made the decision to enter into phase 2 and buy up to 51%. Once this is done or the intention is explicitly made, the project will be further de-risked in the eyes of instos and analysts and the valuation will be increased accordingly.

In summary.

The opportunity is massive here and the preliminary results from the work completed are highly encouraging. In months (note - not days) we should expect to have received results from the lab for core-hole 1, completed the Cerro Padilla well, received results from the lab for Cerro Padilla, acquired seismic, bought 51% < 60% of the project, have an independently certified prospective resource estimate and perhaps a $ sign in front of the share price.