quarterly disappoints, page-6

H,

I feel your pain mate, we all do. Though I must say that I'm not as disappointed in the report as you... the one key point I picked up was the fact that Matamata wis likely to be the first target drilled in Guyane.

What does that tell us? Remember when they were going to drill it alone, and they were going to leave Matamata alone and drill a smaller, higher COS prospect to prove up the basin? There's only one reason why they would drill Matamata first-up.... they are close to, or have found, a farmin partner. A bit of 'reading between the lines' there, but it's quite a large back-flip on their previous stance. If you reverse engineer their original reasoning and outcome (as I had done above), I believe Guyane is close. I admit that it may not be signed, sealed and delivered by end of July as I'd hoped, but it's not as far as away as most thinks.

The other thing is that Tiof concept has been chosen, declaration of commerciality is next subject to concept approval. First oil expected by 2009. So by then, we should have three producing fields - Chinguetti, Tiof, and M&W (and maybe others as well) in Uganda.

As expected, they have bidded for the offshore block in Suriname adjacent to Matamata. This illustrates their confidence in the play. Then again, it wouldn't have reflected too good on Matamata if they hadn't bidded for it.

The Block 7 prospect is also a gas prospect. Combine that with Flamant, this has to be the work of GdF. Finally, we have someone who's willing to actively explore for gas instead of leaving some 2.5TCF of gas sitting idle for years.

As for Chinguetti, did you notice that the production rate actually went up from 32 to 37kbopd from June to July after they fixed 2 of the 3 compressors? Natural field decline was always going to happen with Phase 2 originally flagged for end of 2006/start of 2007 anyway. The key problem appears to be the North side. I suspect when they receieve the independant review, we may not even get a reserve downgrade with increase in the south offseting the reduction in the north (remember they encountered much lower oil.water contact?).

I'm not selling yet, think the market overplayed the Age article yesterday.

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