ann: matuku-1 weekly progress report no. 6, page-15

Yes, to my understanding the pre-drill logic held that the greatest uncertainty with the F Sand target was in having a migration path through the underlying North Cape Shale that was connecting with the F Sand structure. There was good rationale for believing that hydrocarbon was getting away from the kitchen and the hope was that at least one of the possible escape paths would intersect with our long N-S trending structure. Clearly, this has not been the case.

However the entire play is based on the very strong belief that we have a mature kitchen [oil] in the very near vicinity to the Matuku structure. That being the case then we certainly need to be getting strong oil shows as we deepen into the North Cape Sands otherwise the whole play begins to collapse.

The quality of any potential reservoir sand at depth has been the main uncertainty in this target so we will still be needing the lucky break, even if kitchen is present..

Separately, one has to wonder why mention was made in yesterday's notice that both the D Sand and F Sand were found to be porous. Sandstone is porous, that is why we target it, so why on earth state the obvious?

I'm still waiting for more information to come out on the Tikorangi Formation and I note that subsequent to drilling this interval there has been no further mention of P&A after TD.