Hypothetically speaking ..., page-42

Just for a talking point, it's interesting to try and quantify the various risk stages from here v possible returns
should these stages be further de-risked.

Discover-Appraise-Plan-Develop-Produce.

Chance of discovery is about 1/15 or 7% for a wild-cat. The Planning- Production stage still carry carries a
60-80% chance of being successful, midpoint then of 70%. One could deduce therefore that the Appraisal
stage carries a risk of 23% on a basic/crude extrapolation. I am optimistically assuming for now that a 2C will be
booked at around equivalent numbers to the P50's given. This still carries some risk of course, hence the SP being
where it is now, amongst other factors.

A 23% risk for what pay-off? If a 2C is booked and we can get around the $5 in ground value for our share
13.7% or 86mmboo net, then SP should be around 14c + 2c = 16c.

If appraisals are successful and 50% were added to 2C eventually for 130mmboo net to FAR then the
price per in ground would have to be up around the $10 mark, since the risk of 2C & Appraisal have been
mitigated--2 very big risks put to bed. About 42cps + 2c = 44c. Any sale from here would have to include
a higher premium for remaining acreage than that simply attached to a 2C resource previously. Call it
another 25% premium v a 2C resource stage = 55cps.

A 23% risk scenario in appraisal therefore v a possible 250% increase in corresponding value, should
appraisals add 50% to the hoped for current 2C resource of 630mmboo.

A risk worth taking, considering we have jumped the major hurdle of 93% chance against of actually
finding the black stuff in the 1st place.

GLTAH